MAFH’s Views on Mauritius National Budget 2021/22

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By Yusuf Bauluck, Head of Regulations at the Mauritius Africa FinTech Hub – 21 June 2021

The National Budget 2021/22 (the “Budget”) was presented by Dr. the Honourable Renganaden Padayachy, Minister of Finance, Economic Planning and Development of Mauritius, to the National Assembly on 11 June 2021. 

The Budget was presented at a time when Mauritius and the rest of the world are facing an unending onslaught from the COVID-19 outbreak. While the on-going pandemic is severely affecting economic activities and growth on a global scale, Mauritius faced further challenges which the Budget seeks to address and overcome over the next financial year. The Minister highlighted that the Budget is about Recovery, Revival and Resilience. 

The Mauritius Africa FinTech Hub (MAFH) has relentlessly been advocating for collaboration between policymakers, regulators and various stakeholders. We are pleased to note that the Budget shares similar values as MAFH regarding collaboration – and we will be better TOGETHER

Several budget recommendations made by MAFH have been included in the Budget and we are confident that these budget measures are the stepping stones to transform Mauritius into a leading FinTech Hub.

Proposed Regulatory Reforms

The most significant change that will impact the growth of the FinTech industry is the issuance of Regulatory Sandbox Licences by the Bank of Mauritius (BoM) and the Financial Services Commission (FSC). 

Currently, Regulatory Sandbox Licences are issued by the Economic Development Board of Mauritius (EDB) following recommendation from the Technical Committee. The proposed amendments will empower the BoM and the FSC to issue Regulatory Sandbox Licences for activities which fall under their respective purviews. 

The BoM and the FSC will also be authorised to set up FinTech Innovation Hubs for the banking and non-banking financial services sector; the details of when and how these FinTech Innovation Hubs will operate have not been announced but it does sound promising at the outset. 

The proposal for a common platform, operated by the BoM and the FSC, for fitness and propriety will improve the assessment of investors and professionals in the field, thus reducing delays associated with the processing of application for licences, including Regulatory Sandbox Licences, and support ease of doing business in Mauritius. The operation of the online licensing platform, referred to as FSC One, as from 1 July 2021 by the FSC will further support ease of doing business in Mauritius.

The Budget proposed the setting up of a single desk for FinTech related applications. This proposal is appreciated by MAFH, whereby we  have been advocating for such a unit to provide clarity in respect of regulatory framework addressing the FinTech industry. 

The lack of clarity leads to uncertainty, and negatively impact investors’ confidence to establish themselves in Mauritius and current FinTech entrepreneurs to continue their operations in Mauritius. MAFH foresees that the operation of a single desk for FinTech related applications will improve the attractiveness of Mauritius as a jurisdiction for FinTech activities and eventually lead the transformation into a leading FinTech Hub.

Banking and Payments Sector

Banking Sector

MAFH anticipates that the proposed amendments of the two main banking legislations, namely the Bank of Mauritius Act 2004 (BoMA 2004) and Banking Act 2004 (BA 2004). The amended BA 2004 will include definitions for “FinTech”, “Regulatory Sandbox” and “RegTech”.

The Budget proposed the update of guidelines issued by the BoM with regards to the setting up of regional offices by international banks will have the most impact on the banking sector. In order to support open banking initiatives in Mauritius, the Budget proposed that a new guideline for use of Application Programming Interface (API) to be issued by the BoM.

The Budget also proposed disclosure of information with the Central KYC, which is not yet operational, and the setting up of a Central Registry of Accounts to ease reporting of alleged or suspected offences. 

The Mauritius Credit Information Bureau (MCIB) will be empowered to provide credit scoring, essential to many of the financial institutions’ activities. The FinTech industry, such as peer to peer lending operators, will also benefit from the availability of an up-to-date and objective credit scoring methodology to speed decision making. 

MAFH expects that the eligibility criteria to be a participant of the MCIB will not change. However, the data sources and applicable methodology to determine the credit score of an individual are yet to be established. MAFH foresees the issue of a consultation paper and setting up of a working group to discuss the finer details before credit scoring is computed and provided by the MCIB. 

We expect these changes to widen the range of financial products and services on offer in Mauritius. These amendments have the potential to support digital banking business, and effectively provide new channels to access banking services in Mauritius. We are conscious that digital banking will require further guidelines to be issued by the BoM; but in light of the Budget and BoM’s openness to collaborate, digital banking business could certainly be a reality in Mauritius in the near future.

Payments Sector

The payments sector has not been left out in the Budget. The Budget proposed the deployment of a dedicated QR code at national level by the BoM to facilitate digital payments. The Mauritius Central Automated Switch (MauCAS), the central payment switch which is available to banks and non-bank operators, will be upgraded to its next phase of deployment. Potentially, the most impactful change is the opening of bank accounts for licensees under the National Payment Systems Act by the BoM; this will facilitate the delivery of payments services in Mauritius.  

The BoM will also introduce its Central Bank Digital Currency (CBDC), known as Digital Rupee, on a pilot basis. B0MA 2004 already had provisions for the issuance of CBDC, referred to as digital currency under the Act, by the BoM, and this roll-out of digital currency is welcome by MAFH. CBDC has the potential to support the operation of faster payment systems.

MAFH anticipates that the proposed amendment to the BoMA 2004 to empower the BoM to enter into agreement or arrangement with relevant entities to enable it to discharge its functions has the potential to enable FinTech operators to collaborate with the central bank to deliver value added services, such as credit scoring, and support its CBDC and open banking initiatives as observed in other jurisdictions.

Moreover, the Budget mentioned that the BoM will commission a consulting firm to outline the strategy for the ‘Future of Banking’ in and from Mauritius. MAFH is optimistic about the future of the banking and payments sector in Mauritius. 

Non-Bank Financial Services Sector

The Budget proposed that amendments be made to the Financial Services Act 2007 (FSA 2007), and such amendments to include definitions for “FinTech”, “Regulatory Sandbox”, “Regulatory Sandbox Authorisation” and “RegTech”.

In MAFH’s opinion, the announcement of a new legislation for virtual assets in the Budget will offer new opportunities to investors. This is the normal course of event following the issue of guidance notes by the FSC on digital assets which were recognised as an asset-class for investment by sophisticated and expert Investors, Security Token Offerings (STOs) and Security Token Trading Systems (STTS) over the previous years. 

MAFH anticipates that the new legislation for virtual assets combined with the proposed Securities Bill will facilitate the trading of virtual assets in Mauritius; it is a sector which can effectively grow with the support of the FinTech industry.

The Budget proposed the implementation of a digital centralised information exchange system by the FSC to facilitate motor insurance claim recoveries. MAFH anticipates the proposed system could potentially be leveraged upon to support the motor insurance industry to deliver its services across new channels with the assistance of InsurTech operators. 


The Government remains committed to reinforce the AML/CFT regime and comply with international obligations. Even though numerous amendments have already been made to existing legislations to strengthen the sustainability and effectiveness of the AML/CFT regulatory framework, the Budget reaffirmed the Government’s willingness to effectively manage the fight against financial crime by proposing the establishment of a Financial Crime Commission. 

As part of a concerted effort to deal with the challenges presented by financial crime, the FSC and BoM will deliver one-year training on AML/CFT to at least 100 graduates and thus increase the human capital available to effectively address AML/CFT requirements. The graduates will be provided a monthly stipend of Rs 15,000. These measures will help Mauritius to maintain its reputation and soundness as an International Financial Centre and appeal to investors. 

Monitoring and Assessment of Regulatory Frameworks 

The Budget proposed the establishment of a Regulatory Impact Assessment Office (RIAO) and a Business Regulatory Review Council (BRRC) to assist with the review and continuous regulatory reforms in Mauritius. 

The RIAO will be set up when the proposed Regulatory Impact Assessment Bill comes into force; this legislation will require regulators, amongst others, to submit an impact assessment of upcoming regulations on the business environment to RIAO. The Prime Minister’s Office will oversee and monitor the quality of assessments submitted to RIAO.

The BRRC is proposed to be set up under the aegis of the Ministry of Finance, Economic Planning and Development. The BRRC’s mandate shall be to address regulatory and administrative reform needs, advise Government on regulatory policy, and will have the power to recommend and instruct regulatory bodies for implementation. The BRRC will be assisted by the EDB in the performance of its functions. 

The proposal to establish RIAO and BRRC will facilitate regulatory reforms and addresses the need for regulatory frameworks which are adapted to the FinTech industry, and does not impact its growth as an innovative sector. 

MAFH expects more consultation papers to be issued by regulators and government agencies in the course of conducting their impact assessment and is of the opinion that this will support a collaborative approach which will lead to a shared understanding of the needs of the FinTech industry and promote the transformation of Mauritius into a leading FinTech Hub. 

Furthermore, MAFH expects that the setting up of RIAO and BRRC will lead to clarity in respect of the regulatory framework addressing the FinTech industry. 

Digital Transformation and Data Sharing Initiatives

The digital transformation initiatives proposed by the Budget include the deployment of mobile and contactless systems across numerous government agencies. The Registrar-General, National Land Transport Authority, and the Companies Division will be the first to benefit from these new methods of payments. The Budget proposed the extension of the I-Council project to improve effectiveness and efficiency of services offered to the public by local authorities; the project is expected to be completed by June 2022. 

The Budget proposed the implementation of several platforms which would facilitate the sharing of information between various government agencies. A platform to facilitate the exchange of information between the Mauritius Revenue Authority and Corporate Business Registration Department has been proposed in the Budget. 

The regulators, as mentioned above, shall be facilitating the exchange of information; namely the setting up of a Central Registry of Accounts and Central KYC and upgrading of the MCIB by the BoM, the FSC will be setting up of an online licensing platform and empowered to exchange information with a supervisory body subject to amendments to the FSA 2007 or other public sector agency to discharge its functions, and the joint operation of a platform by the BoM and the FSC to perform assessment of fitness and propriety.

Similarly, the Economic Development Board Act, the Business Registration Act, and the Mauritius Revenue Authority Act will be amended to facilitate the sharing of information between these agencies. The Immigration Act will also be amended to enable the Passport and Immigration Office to share information of non-citizens to concerned stakeholders for verification purposes.

These digital transformation initiatives and proposed projects to facilitate the exchange of information between government agencies have the potential to support the growth of the FinTech industry in Mauritius. 

Talent Base in Mauritius

The shortage of talent in innovative sectors, such as Artificial Intelligence, Data Science, and Blockchain technologies, have been raised by various stakeholders and MAFH on numerous occasions. 

The proposal to set up a Digital Industries Academy by the EDB and offering trainees a total stipend of up to Rs 15,000 equally shared between the Human Resources Development Council (HRDC) and the private sector is welcome and much needed to alleviate this shortage of talent in Mauritius. Training funds will also be made available by the HRDC for digital transformation initiatives. 

Access to Finance

The Budget proposed that all businesses will be required to register with the EDB prior to benefitting from incentives and schemes introduced by the Government. 

The current schemes will be streamlined and three certificates will be issued by the EDB, namely the Investment Certificate, Export Development Certificate, and the Premium Investor Certificate. 

Companies investing at least Rs 500 million will be eligible for the Premium Investor Certificate, and such companies will benefit from negotiable incentives following the recommendations of a Technical Committee and approval by the Minister. 

The Budget proposed the setting up of a Rs 5 billion Modernisation and Transformation Fund which will be administered by a new Industrial Financial Institution (IFI) and take over the activities of the ISP Ltd and SME Equity Fund. 

The threshold of investment by the IFI through licenced crowd lending platforms will be increased from Rs 200,000 to Rs 1 million per project. 

MAFH is of the opinion that the increase to the investment threshold on crowd lending platforms will benefit such operators.

The acquisition of specialised software and systems will be eligible to 200 percent deduction from taxable income. It is unclear at this stage whether eligibility to this double exemption will be limited to specialised software and system developed in Mauritius, or any other conditions which need to be satisfied.  

Last but not least, the Budget laid the stepping stones; now it is the time to implement these measures and continue our journey TOGETHER to transform Mauritius into a leading FinTech Hub.

The views expressed in this document are based on the budget speech, including its annexure, delivered by Dr the Honourable Renganaden Padayachy, Minister of Finance, Economic Planning and Development, to the National Assembly, on 11 June 2021, data collected from the FinTech ecosystem, and MAFH’s budget recommendations. 

Please note that budget measures may be subject to amendments following debates in Parliament.

This publication has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. You may reach out to MAFH’s Head of Regulations, Yusuf Bauluck, for any query in this regards.


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