UNCDF, Central Bank conduct training on regulatory awareness of fintechs

The United Nations Capital Development Fund (UNCDF) in partnership with the National Bank of Rwanda (BNR), Capital Market Authority (CMA), Rwanda Utilities and Regulatory Authority (RURA), Ministry of ICT and Innovation (MINICT) and the ICT Chamber, have organised a two-day training with an aim of increasing knowledge of fintech service providers' regulatory environment and raising the number of regulatory-compliant companies. The training which kicked off on October 31 and closed on November 1 brought together different local fintech companies, lawyers, as well as regulatory bodies. Fintech refers to the integration of technology into offerings by financial services companies in order to improve their use and delivery to consumers. During the training which took place at Kigali Convention Centre, participants covered topics that include BNR regulatory environment trends in the regulatory environment for fintechs, consumer protection, fintech regulatory sandbox for capital markets in Rwanda, RURA’s cooperation with BNR in regulating and licensing Fintech as well as the ICT licensing framework. They also discussed Challenges in the regulatory environment and adapting to the fast-changing fintech world and cooperation between regulators. According to Chris Songa Musonera, a BNR staff in charge of fintechs and digital payment, the training helped the institution to raise awareness on what they do and the regulatory services they offer, given that some fintech companies do not understand them, hence neither follow them nor know where to get information which he said creates a gap concerning good service delivery. “This training helps us to explain to them the regulations that are in place, how important they are and what kind of help we offer,” he said. Musonera also tackled a regulatory sandbox, declaring that its service is offered to financial innovators, especially fintech innovators, to allow them to test their products for a period of 12 months with minimal requirements before getting a full license for operation after successful testing. He said that however, in doing so, they are considerate about the risks concerning service delivery as well as consumer protection, adding that they do not allow a fintech with cybersecurity issues or without a tested prototype to operate. Sandboxes’ frameworks were developed by the Government of Rwanda, BNR, CMA and RURA to support ICT innovations and create a conducive regulatory environment for different technology innovators such as Fintech, Wealthtech, Regtech to test their products on real customers in a monitored environment. Musonera urged companies or individuals coming up with fintech innovations to create those that solve problems that are available in the community and approach BNR for licensing as well as to provide feedback on how regulatory frameworks can be improved. Raymond Asiimwe, a lawyer from Bytelex, a firm that works with local tech companies and start-ups was part of the training. He said the regulators are progressive and keep changing regulations for the better since some fintech innovations grow faster. Asiimwe also noted that apart from putting a regulatory sandbox in place, the regulators can also employ a ‘wait-n-see approach,’ allowing fintech companies to operate and then wait, learn from them and regulate them instead of putting in place regulations before the innovations are rolled out. Jean-Hubert Ishimwe Nkurayija, who owns Favouriapps, a fintech company that created Kashi app which helps users in money management and to have a shared wallet, said the training helped him to learn about different regulations that are in place for fintechs and why he needs to comply with them. He loved the idea of having a regulatory sandbox, declaring that it makes it easier for fintech companies with innovative products that are beneficial to the community to test them on the market with minimal requirements. “It is a great opportunity for us and it shows that the government is willing to help local fintech companies to grow,” he said. “Innovators shouldn’t only be excited about rolling out their products on the market but also think on the regulatory and cybersecurity side, hence following the procedures that were eased.” Since 2019, UNCDF has been facilitating the development of the fintech environment in Rwanda by conducting a Fintech Landscape Study that produced insights on the fintech environment in Rwanda, including regulatory and policy challenges and setting up a fintech innovation hub to support fintech companies with technical skills, seed capital, awareness of the regulatory environment and access to the market.

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UNCDF, Central Bank conduct training on regulatory awareness of fintechs