DECLARATION -~·•··················································································~·····················APPROVAL ......................... ~························································································· II
DEDICATION .............................................................................................................. iii
ACKNOWLEDGEMENTS·····~·····································"·················································· iv
TABLE OF CONTENTS .....•..•......•.................................................................................. v
TABLE OF STATUTES AND REGULATIONS ................................................................ viii
REGULATIONS .......................................................................................................... viii
TABLE OF CASES ........................................................................................................ ix
ACRONYMS .................................................................................................................. x
ABSTRACT .............................................................................. ~ ................................... xi
CHAPTER ONE ............................................................................................................. 1
GENERAL INTRODUCTION .......................................................................................... 1
1.0 Introduction .............................................................................................................. 1
1.1 Background of the study ............................................................................................ 1
1.2 Statement of the problem .......................................................................................... 6
1.3 Objectives of the study .............................................................................................. 6
1.3.1 Specific objectives .................................................................................................. 7
1.4 Research questions ................................................................................................... 7
1.5 Scope of the study .................................................................................................... 7
1.6 Significance of the study ............................................................................................ 7
1.6.1 Hypothesis ............................................................................................................. 8
1. 7 Methodology ............................................................................................................. 8
1.8 Literature Review ...................................................................................................... 8
1.9 Chapterisation .......................................................................................................... 15
V
CHAPTER TWO ............................ ~ ............................................................................. 16
THE CONCEPTS AND THE VARIOUS MODELS OF MOBILE MONEY IN NAIROBI ...... 16
2.0 Introduction ............................................................................................................. 16
2.1 Mobile Money ........................................................................................................... 16
2.2 Why Mobile Money ................................................................................................... 17
2.3 Categorization and Concepts ..................................................................................... 18
2.3. l Bank-Focused Model. ....................................................................... , ..................... 18
2.3.2 Bank-Led Model. .................................................................................................... 18
2.3.3 Nonbank-Led Model/ Mobile Network Operator Model (MNO) ................................... 19
2.2.4 Hybrid Model. ........................................................................................................ 20
CHAPTER THREE ....................................................................................................... 23
THE LEGAL REGIME OF MOBILE MONEY AND THE RISKS ENCOUNTERED BY
CONSUMERS AND SERVICE PROVIDERS .................................................................. 23
3.0 Introduction ............................................................................................................. 23
3.1 The Legal Regime ..................................................................................................... 23
3.2 Pertinent legislations influencing the operation of Mobile Money services in Kenya ....... 24
3.2.1 The Bank .............................................................................................................. 24
3.2.2 Information and Communications Technology ......................................................... 26
3.3 The New Regulatory Framework ................................................................................ 28
3.3.1 The National Payment System (NPS) Regulations of 2014 ........................................ 28
3.3.2 Proceeds of Crime and Anti-Money Act No. 9 of 2009 .............................................. 32
3.4 Challenges .................. , ............................................................................................ 33
3.4.1 Legal Challenges ................................................................................................... 33
3.5 Risks ....................................................................................................................... 35
3.5.1 Operational risk ..................................................................................................... 35
3.5.2 Security risk .......................................................................................................... 36
3.5.3 Reputational Risk ................................................................................................... 37
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CHAPTER FOUR.~ ........................................................................................................ 39
THE RECOMMENDATIONS FOR THE MODIFICATIONS OF THE LEGAL REGIME ON
BANKING IN NAIROBI .............................................................. w••························g···· 39
4.0 Introduction ............................................................................................................. 39
4.1 Recommendation ..................................................................................................... 39
4.1.1 Legal Recommendation .......................................................................................... 39
4.2 Other Recommendations .......................................................................................... .41
4.2.1 Backup and recovery ............................................................................................ .41
4.2.2 Monitoring against threats ...................................................................................... 42
4.2.3 Education and review ............................................................................................ .42
4.2.4 Approval for Mobile Money Services ........................................................................ 42
4.2.5 Harmonization ...................................................................................................... .43
CHAPTER FIVE .......................................................................................................... 44
THE RESEARCH FINDINGS AND CONCLUDING REMARKS ................. .., ................... 44
5.0 Introduction ............................................................................................................ .44
5.1 Conclusion ............................................................................................................... 44
BIBLIOGRAPHY ........................................................................................................ 47
ABSTRACT This study focused on the Mobile Money transfer services in Nairobi. What is majorly the point of concentration, is the legal implications mobile money came along with , and whether there was need to amend the existing legal regime in order to take care of the challenges and risks that faced thereof. Hence, it is at this point that the study introduced the research topic. It discussed vividly the background of the study, objectives of the study, scope and methodology, The objective of the study was mainly to assess the effectiveness of the existing legal framework and regulatory challenges of mobile money services in Nairobi. For this reason this study did a literature review of various work written by a number of authors to fill in the gap left Equally, this study analyzed the various concepts and models of mobile money services that are available in Nairobi, in order to bring out a clear understanding of what Mobile Money is and its importance. It also delved into identifying the specific risks and challenges encountered by consumers and service providers due to lack of effective laws and policies in place. This was done after critically analyzing the legal regime influencing Mobile Money in Nairobi. Finally, the study proposed recommendations and concluding remarks on how the challenges and risks faced may be addressed. This was to enable the regulators get a view of what Mobile Money Services had faced due to inappropriate legal framework and where to incorporate amendments or come up with new enactments to regulate the services and ensure its positive contribution towards the economy in Nairobi.
