A couple of months ago, we learned and reported that Airtel Money was going to be split from Airtel Kenya. It marked the first mobile money product that was heading in that direction, bearing in mind that other mobile money services will be split from their mother companies before the year ends or by early 2023.
The Central Bank of Kenya has also been pushing the split agenda, alongside other agencies and members of Parliament. The plan is to ideally run mobile money services as different entities that will be regulated by the said CBK. Their mother companies will focus on other products, including carrier services.
Now, the CBK has revealed that the transfer of the mobile money business to Airtel Money Kenya Limited (AMKL) is a done deal. The journey towards this development actually started in 2019, but we only started to hear about it sometime this year.
“CBK this milestone. The completion of this restructuring enables AMKL to ring-fence its operations and focus exclusively on its mobile money business. Significantly, this sets the foundation for AMKL to enhance governance over its mobile money business, strengthen its operations, and offer better services to its customers,” said the CBK in a statement.
AMKL has since been licensed as a Payment Service Provider (PSP) as stipulated in the National Payment System Act, 2011. The deal was sealed at the start of the year, and AMKL was then given a transition period to complete the separation.
Other mobile money products and payment services will surely join the separation move. The CBK says that this will protect payment service providers from issues related to other business activities. The Bank also adds that the separation will be instrumental in strengthening governance, enhancing resilience and help in improving services to customers.
Airtel Kenya and Airtel Money are incorporated in Kenya. They are subsidiaries of Airtel Africa, which is headquartered in Dubai. Airtel Africa run operations in 14 African states.
In June, Airtel Kenya sold 25.77 percent of its mobile money product Airtel Money in a deal that sought to raise more cash for the company’s operations.
The sale saw four companies give Airtel Kenya $550 million after the transaction. They were Rise Fund, which invested $200 million, followed by Mastercard at $100 million. Qatar Holding LLC invested $200 million, while Chimera Investment LLC parted with $50 million to round up the stake’s purchase.