Kenya: Equity Wins Mobile Money Transfer Case

Equity Bank's mobile money transfer services got a boost after the High Court dismissed a case challenging its operations.

Lady Justice Mumbi Ngugi ruled that there was no evidence to prove the licence granted to the bank to operate the service was obtained irregular, and that its operation did not violate consumers' rights.

"The licences issued to the respondent was subject to contractual obligations, which did not require any public participation. I therefore did not find any violation of consumers' rights to warrant cancelling the licence," ruled Ngugi.

The suit against the bank's Mobile Virtual Network Operator (MVNO) licence granted through its subsidiary for mobile services Finserve Africa Limited was filed by Consumers Federation of Kenya (Cofek).

Cofek argued that the Communication Authority of Kenya (CA) did not follow the right procedure in issuing the MVNO licences to Finserve Africa Limited and two other firms, Zioncell Kenya Limited and Mobile Pay Limited.


According to the consumers lobby, CA allocated the licences in an opaque manner without any public tender or public consultation of consumers who are supposed to be the beneficiaries of the mobile money services.

Cofek said that consumers were suspicious about the three firms' indication that they will provide mobile money transfers when they have not shown the necessary approval from the Central Bank of Kenya.

"There has been no practical assurance of safeguarding consumers from bad services associated with mobile money service providers. The agreements have no assurance that they will not turn out to be pyramid schemes as witnessed in the past," said the lobby.

The lobby had accused CA of violating the law by failing to give a notice of at least 30 days in the Kenya Gazette before issuing the licences, claiming that the process was not transparent and did not put the interest of consumers first.

They further alleged that the agreements raised security questions especially the fear of money laundering in the event of a fraudulent transaction which would wipe out consumers' savings.