What does African fintech need? • Techpoint Africa
On Wednesday October 6, 2021, the BBC Insider Series hosted a few players from the African fintech sector for a panel discussion to discuss the progress the sector is making in helping innovation and financial inclusion in Africa.
Moderated by BBC presenter Zeinab Badawi, the panel included Olugbenga Agboola, Founder and CEO of Flutterwave, Usoro Usoro, CEO, Y’ello Digital Financial Services, MTN’s fintech subsidiary, Bola Asiru, Principal / Divisional Lead, Sub-Saharan Africa for Mastercard Advisors, and Yasmin Masithela, Managing Executive, Transactional Banking, Absa Corporate and Investment Banking.
The virtual event focused on the attractiveness of fintech for investors, the benefits Africans derive from fintech start-ups, partnerships between banks and fintech startups, and the role of regulators in the industry. .
Discussing the attractiveness of fintech to investors, the panelists unanimously agreed that the breadth of opportunities available to players in the fintech industry is an important factor in why investors are supported by the fintech.
According to the Mastercard Foundation, in 2017, around 43% of people living in sub-Saharan Africa were financially included. This represents a huge opportunity for investors and entrepreneurs keen to look beyond the myriad of challenges they are sure to face to create solutions.
However, for Usoro, beyond scale, the unserved segment of the market also represents a huge opportunity. “When you look at the market segment, you look at a lot of people who are not being served and when you look at the segment served, there are still a lot of people who haven’t adopted the services. So it is both the scale and the fact that many people are still not served that make the market very attractive.
With the speed of innovation and execution of fintech, arguments have been made regarding the potential of fintech to replace traditional banks. However, Agboola disagreed with this view, arguing that he sees a situation in which fintech complements the work of banks and vice versa, arguing for partnerships between banks and fintechs.
Even with the gains made, there is still a long way to go for fintech to fill the financial inclusion gap in Africa. For this, Usoro argued that fintech, in addition to providing a huge opportunity for investors, also does good in the communities where they operate. “It’s commercially attractive to investors, but it also benefits society. “
“With the type of services we provide to clients, whether they are micro-loans that allow SMEs to access inventory on a day-to-day basis, many of these services are truly transforming the lives of our clients. “ He added that with innovations in USSD technology and the adoption of agent banking networks, fintechs are able to make it easier for most users to access financial services.
Deepening financial inclusion is high on the agenda of the Central Bank of Nigeria and Y’ello Digital Financial Services has played its role in helping the apex achieve this goal. With its extensive network of over 150,000 MoMo agents, the organization provides financial services to its clients.
Customers can pay bills, deposit and withdraw money, as well as purchase data and airtime from agents. Through partnerships with more than 40 banks and financial institutions nationwide, customers can securely access funds in their accounts without using an automated teller machine (ATM).
With 54 countries in Africa, providing financial services to users comes with many regulatory hurdles in every country. However, startups still need to create services for users. Usoro said that being able to create solutions that take these differences into account could solve these challenges.
“On a tech and fintech level, the ability for us to create an interoperable switch to allow multiple currencies and multiple wallets to communicate seamlessly may be one of the things we need to do to overcome this hurdle. “
Some might argue that there are too many players in the FinTech sector in Africa, but with the scale of the problem, it may be necessary for more players to step into the ring to address some of the issues.
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