Three fintech startups admitted to Kenya’s Regulatory Sandbox

Three Kenyan fintech startups have been admitted to the Kenyan Capital Markets Regulatory Sandbox. The startups are Pezesha Africa, a micro-lending marketplace and Innova Limited, a cloud-based analytics platform for investors and a third firm which remains anonymous. 

The startups have been admitted to live-test their innovative solutions with the capacity to deepen and enhance the efficiency of capital markets. 

Pezesha will test its digital crowdfunding platform which allows investors to provide loan facilities or debentures for SMEs while Innova will test its cloud-based data analytics platform designed for use by Investors, Fund Managers, Custodian Banks, Actuaries, Pension Administrators, and Regulators.

CMA Chief Executive Mr Paul Muthaura said that Innova and Pezesha will be updating the Authority on the milestones achieved, challenges faced and mitigation measures implemented in line with the test plans submitted to the CMA during the application process.

He said the regulatory sandbox has been set up to allow live testing of innovations under a less onerous regulatory regime and is expected to attract fintech companies and existing capital markets licensees to test the application of technology to financial services. 

‘’The admission of the three firms is an important milestone noting that the Authority had set itself a target to admit five firms to the Regulatory Sandbox by 2023’’, said Mr. Muthaura.  

The approval restricts the testing period for each firm to 12 months. The third fintech firm admitted has elected to remain anonymous during its three months test period, except to its closed group of test subjects. 

The Regulatory Sandbox serves to continuously improve CMA’s understanding of emerging technologies as well as the risks and opportunities that the innovations portend for investors, financial institutions and the regulator. The insights from the tests allow for a more evidence-based approach to regulation.

Regulatory sandboxes according to a G20 report on digital financial inclusion in emerging economies are a means of balancing innovation and risk in favour of financial inclusion.

The report notes that “Regulatory sandboxes [could] enable innovations that are likely to benefit excluded customers, regardless of whether inclusion is a key objective. FinTech innovations can lead to more affordable products and services, new distribution channels that reach excluded groups, operational efficiencies that make it possible to serve low-margin customers profitably and compliance and risk-management approaches,”

Upon exit from the Sandbox, the participating startups could be granted a license or approval to operate in Kenya subject to compliance with existing legal and regulatory requirements.

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Nixon Kanali

Tech journalist based in Nairobi. I track and report on tech and African startups. Founder and Editor of TechTrends Media. Nixon is also the East African tech editor for Africa Business Communities. Send tips to

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