Documented examples

The move, and what it needed

The central bank issued a letter of no objection instead of demanding a banking licence, set conditions on trust accounts holding customer float, and wrote the e-money regulations after the system worked, legalising what it had learned rather than licensing what it could imagine.

Preconditions

• A regulator senior enough to carry the risk of saying yes
• A mobile operator with national agent reach and its own fraud controls
• A banking sector too small in reach to block the entrant

Where else it has been used: Mobile money spread across Africa and South Asia, but mostly where regulators copied the permissive sequencing. Where banking law was applied first, including in some of Kenya's neighbours for years, adoption stalled.

The move, and what it needed

The presidency decreed a national literacy programme, and the education ministry, and later a social protection directorate, ran it through state-paid instructors in community adult education centres in every district. Enrolment fell by half over a decade as the function moved between ministries and county returns degraded.

Preconditions

• A large adult population that had missed primary school
• A ministry department with paid instructors at district level
• A political mandate that framed literacy as a national campaign rather than a welfare service

The move, and what it needed

The Capital Markets Authority issued a policy guidance note that let fintech firms and incumbents test capital markets products with real customers under relaxed rules, then used each exit as the moment to grant a licence or approval under the Capital Markets Act.

Preconditions

• A regulator with statutory power to grant no-objections and tailored approvals
• A domestic fintech sector already built on mobile money rails
• Peer regulators abroad, through the Global Financial Innovation Network, to copy procedures from

The move, and what it needed

The drought authority pre-registers and banks almost every household in the arid north, pays the poorest a regular transfer, and uses satellite vegetation triggers to extend payments to more registered households when drought hits, so money can move without a new targeting exercise.

Preconditions

• A household registry and bank accounts set up before the shock
• A trigger rule tied to an objective drought index
• Contingent money ready to flow when the trigger fires, which is where Kenya's version fell short in 2021 to 2023

Where else it has been used: Ethiopia's PSNP and the Sahel adaptive safety nets use the same scalable design. The Kenyan retelling shows that the registry and trigger are the easy part: the contingent finance is what fails under fiscal stress.

The move, and what it needed

The central bank changed loan classification and provisioning rules by circular within a week of the first case, letting banks extend repayment, grant moratoria and waive fees on loans performing before the shock, and set a fixed expiry date after which standard classification resumed.

Preconditions

• A central bank with direct supervisory authority over loan classification
• Banks capitalised enough to carry restructured loans for a year
• A dated cut-off (loans performing on 2 March 2020) that kept pre-existing bad loans out

Where else it has been used: Time-bound restructuring windows were used by many central banks in 2020; the fixed expiry and the published cumulative-versus-outstanding figures are the part that makes Kenya's version auditable.

The move, and what it needed

The Treasury and Kenya Railways contracted a Chinese state contractor on a design-build-supply basis with Exim Bank finance, which put construction risk and speed on the contractor and left financing, land acquisition and traffic risk with the state.

Preconditions

• A bilateral lender willing to finance most of the cost against sovereign guarantees
• A state able to acquire a 472 km corridor of land quickly
• A port whose cargo the state could steer onto rail to fill the line