President Uhuru Kenyatta on Thursday said Kenya will return licences to 13 money transfer firms that were banned after a deadly attack on a university in April and whose names are on a list of 85 entities with alleged links to Somalia's al Shabaab.
The killing of 148 students by al Shabaab militants at Garissa, some 200 km (120 miles) from the border, had piled pressure on Kenyatta to deal with the Islamists who have killed more than 400 people in Kenya in the last two years.
Rights groups say the ban has had a devastating impact on Kenya's Somali community, numbering just over 1 million people, as it is heavily reliant on cash from workers abroad.
Kenyatta said in a message to Muslims on the first day of the holy fasting month of Ramadan that he had been briefed about proposals to lift the ban as part of investigations into terrorism funding."In the light of this, I direct the Central Bank of Kenya to immediately issue comprehensive regulations that guide the operation of MRPs, upon which their suspension would be lifted," he said, referring to so-called Money Remittance Providers.
He did not say whether the firms would be taken off the list of al Shabaab-linked entities.
Abdirashid Duale, chief executive officer of Dahabshiil, a leading remittance firm, welcomed the move and denied any link between his firm and al Shabaab.
"Dahabshiil has always been committed to existing regulations of the Central Bank of Kenya and commits itself to any new set of regulations the bank issues,” he said in a statement.
The owner of another of the banned remittance firms told Reuters the companies have not been told how long it will be before they can start operating in Kenya again.
(Reporting by Drazen Jorgic and Edmund Blair; Editing by Louise Ireland and Mark Trevelyan)