Overview:
Some of the corrective measures that the Central Bank advised were to have a fully constituted board, unwind the shareholder from direct management of the company to only sit exclusively on the board, hire an internal auditor, raise more capital to fit trade volumes and do regular reporting to the Central Bank
The Bank of Uganda (BoU) in exercise of its powers under Section 9(2) of the National Payment Systems Act, 2020 has lifted the suspension of the Payment Service Provider and Payment Systems Operator licenses of Pivot Payments Limited.
In a public notice, BoU noted that the suspension follows the implementation of the corrective measures agreed upon between BoU and the management of Pivot Payments Limited.
On February 29, 2024, the financial service provider’s licenses were suspended by BoU citing several issues in operations, gaps in governance where the board was not fully constituted and capital where the trade volume had superseded the capital reserves.
According to Shamirah Kimbugwe, founder and managing director of Pivot Payments Limited, some of the corrective measures that the Central Bank advised were to have a fully constituted board, unwind the shareholder from direct management of the company to only sit exclusively on the board, hire an internal auditor, raise more capital to fit trade volumes and do regular reporting to the Central Bank.
She noted that the financial technology space in Uganda is relatively young with many of the players experiencing strict regulation for the first time – which means oversights and mistakes are bound to happen but the most important factor is the regulator’s willingness to guide.
She therefore appreciated the National Payments Services (NPS) team at Bank of Uganda that while they had the prerogative to be antagonistic, they chose to be corrective and collaborative.
“The regulator’s unwavering risk-averse approach to the industry is aimed at consumer protection and at the same time ensuring that institutions build sustainable and profitable businesses. It is evident from their engagements that benchmarking on sister institutions within the region is fundamental to their objective of building a vibrant payments industry to attract investment,” Kimbugwe said.
Kimbugwe added that when they got suspended, the first reaction among the public was that there had been fraud in the company but she assured that that was not the case and they have invested heavily in cyber security providers and cyber security insurance policies such that in the event of fraud, there is a back up which ensures that customer money is not affected.
“We want to assure our customers and vendors that during this period, customer data and our systems remained safe. We are going to continue providing payments (collections and disbursements), wallet services for safe keeping of money and consolidate our UAE corridor as the only company that focuses on providing tailor-made financial solutions for our young ladies and gentlemen serving in the Middle East, as well as serving the business class (SME) here in Uganda,” she said.
The company fully resumes operations on December 20, 2024. By the time of its closure, Pivot Payments Limited had registered over 100,000 customers and cumulatively traded over Shs 72 billion with more than 1.4 million transactions since its inception five years ago.
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