M-KOPA, a Kenyan asset financing company, has emerged victorious in a trademark case against a former agent who copied its brand identity. The High Court ruled on January 23 that John Waweru Njenga's business, "MKopo Kastomer Care and Accessories," had violated M-KOPA's trademark rights.

The case, initially filed in August 2023, centred on Njenga's deliberate use of a nearly identical name and logo to M-KOPA's, which the court determined could easily mislead consumers into believing the two businesses were affiliated, thus helping "MKopo" to siphon off customers and revenue pipeline from M-KOPA. This case exposes a common problem in Kenya's informal markets, where businesses often copy established brands to attract customers. Poor enforcement of intellectual property (IP) laws has allowed this practice to continue.

However, the M-KOPA case will set a precedent for big brands to follow to protect their business IP. It teaches smaller brands the lesson of both protecting their intellectual property and conducting thorough trademark searches before launching new businesses to avoid costly legal battles like this one.

In other news, LemFi, the migrant-focused remittance startup, has acquired Bureau Buttercrane, an Irish remittance company, as it begins its European expansion independently. The acquisition will allow Lemfi to operate across the European Economic Area (EEA) using its Irish licence through a system called passporting, which allows companies to operate across the EEA using a single licence.

The acquisition was purely for regulatory cover and is similar to when fintechs in Nigeria buy MFB (Microfinance Bank) licences—they're not looking for profitability or the technology in the acquired company but for regulatory cover. Lemfi told its customers it could operate in Europe 22 days ago after partnering with Modulr Finance, a Dutch company. But, CEO Ridwan Olalere told TechCabal that his startup partnered with Modulr while pushing for approval from the Central Bank of Ireland.

Operating in multiple markets is necessary for remittance startups to grow as they serve more corridors (US to India, Europe to Africa) and increase their revenue base. More corridors mean a broader and stickier user base, as customers will likely remain loyal if they see the company as a one-stop solution for sending money to different places. Lemfi's growth in the past year when it grew from $2 billion processed in 2023 to over $10 billion in 2024 was attributed to its expansion into Asia in 2024. The company also doubled users, revenue, and transactions over the past two years. Now, it will look at Europe's $64 billion remittance market as the next market to drive its growth.

With the deal completed, Lemfi plans to make Dublin its European headquarters, hire local staff, and deepen its relationship with regulators as part of its long-term strategy.

In related news, 23 Kenyan banks have lowered their interest rates for the first time in six months since the Central Bank of Kenya (CBK) started easing benchmark rates. While lending rates have declined slightly, the shift has been uneven, with some banks reducing rates while others remain cautious.

The surging NPL ratio points to the ongoing challenges in loan repayment among borrowers. This has made lenders hesitant to lower rates too aggressively, as they must balance CBK's policy direction with staying solvent. By June 2024, customer deposits at commercial banks were down 7.4%—likely due to economic challenges—forcing banks to charge higher interest rates to cover the risk of bad loans and lower profits.

However, following the CBK's plea for a downward adjustment of their lending rates, Kenyan banks, through the Kenya Bankers Association (KBA) in December, said lending rates would drop "progressively" because banks depend on customer deposits to issue loans.

With 23 of its 43 member banks now on board, the adjustment could ease borrowing costs. But only one bank—Access Bank Kenya—offers a rate below 15% (11.46%), while the average remains high at an average of 16.89% even after the adjustment.