Business
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After nearly eight months, the Bank of Uganda has lifted the suspension of the Payment Service Provider (PSP) and Electronic Money Issuer (EMI) licenses of Pivot Payments Limited.
According to the Founder of Pivot Payments Limited, Shamirah Kimbugwe, the company— which had registered over 100,000 customers and cumulatively traded over Shs 70 billion with more than 1.4 million transactions before its closure in February this year will resume operations on December 20, 2024, as it finalizes regulatory requirements set by the central bank.
On February 29, 2024, the Bank of Uganda suspended the PSP and EMI licenses of Pivot Payments Limited, citing operational gaps.
These included shortcomings in corporate governance and capital requirements, where the company’s trade volume had surpassed its capital reserves.
Speaking to journalists in Kampala, Kimbugwe explained why the regulator took action against the company.
“Our board was not fully constituted, and our trade volumes had surpassed our capital reserves,” Kimbugwe admitted.
She also acknowledged that there were critical concerns that required urgent corrective measures.
“The financial technology space is relatively young, with many players experiencing strict regulation for the first time. This means oversights and mistakes are bound to happen. The most important factor is the regulator’s willingness to guide.”
Kimbugwe added, “We want to appreciate the National Payments Services (NPS) team at the Bank of Uganda. While they had the prerogative to be antagonistic, they chose to be corrective and collaborative.”
She emphasized that the engagements had been a learning curve for both institutions and the industry at large.
“The regulator’s unwavering, risk-averse approach to the industry is aimed at consumer protection while ensuring that institutions build sustainable and profitable businesses.”
While the fintech space has grown rapidly—with the number of providers increasing from around 20 to over 40 in the past eight months—Kimbugwe assured customers that their data and savings had remained intact.
“We want to assure our customers that during this period, customer data and our systems remained safe. Furthermore, we are going to focus heavily on customer engagement to attract more users.”
The company is now seeking an additional $10 million for recapitalisation as it awaits the Bank of Uganda’s approval of its board.
Pivot Payments is the only fintech company to face regulatory action from the Bank of Uganda this year. However, Mercantile Credit Bank Limited was also closed on similar grounds.
