Closer ties with the City of London likely to encourage further fintech investment into Kenyan capital.
During Kenyan president Uhuru Kenyatta’s visit to London this week, the UK government announced £132m ($184m) of new UK investment in the east African country.
Mr Kenyatta’s visit saw the launch of the Nairobi International Financial Centre, and a formal partnership with the City of London, which fosters closer ties between the London and Nairobi stock exchanges. The investment package seeks to bolster the Kenyan capital’s position as a regional financial hub.
UK insurer Prudential will be the first non-African company to set up its regional head office in Nairobi under the new arrangements. Meanwhile, Kenyan mining company Mayflower Gold announced plans to list its shares on both the London and Nairobi bourses.
In 2019, financial services foreign direct investment (FDI) into Kenya funded 21 projects with a total capital expenditure of $243.7m, leading to the creation of 585 jobs, according to FT-owned greenfield data monitor fDi Markets. However, the onset of the Covid-19 pandemic led to an 85% slump in investment last year to $34.8m.
In the first five months of this year, three financial services investment projects totalling $25.5m have created 152 jobs.
Recent financial services FDI has tended to focus on fintech. Last year, US cross-border payments firm Chipper Cash expanded its east African headquarters in Nairobi, while US-based Messier 31, which trades as Pngme and is developing a consumer financial data platform for lenders and financial institutions, opened an office in the Kenyan capital.
In May this year, Tutuka, a payment processing company that operates as a subsidiary of UK-based SaltPay, established a new presence in Kenya, while in March US venture capital firm Flourish Ventures opened an office in Nairobi focused on fintech investments.
