Fintechs are proving to be game changers in Africa by transforming service delivery, with greater efficiency. The sector is courting foreign investors; last year, African tech startups raised investment worth US$334.5mn, with Nigeria, South Africa and Kenya being the principal recipients, according to African Startups Funding Report 2018.
Wide ranges of services are now accessible to millions of Africans at a fingertip, thanks to ubiquity of the mobile phone. Fintech providers are leveraging economies of density and reliable network to expand their portfolio of services.
Some of the services include remittances, insurance premiums (Lesotho), pension payments (Ghana), investing in Government securities (Kenya), or stock markets, paying utility bills and receiving wages, as well as buying goods and services online. Some providers even allow households to borrow electricity on monthly instalments, thus avoiding blackout.
Recently, Safaricom has secured a deal with ‘AliExpress.com’ owned by Chinese e-commerce giant Alibaba Group. This will allow M-Pesa users to do online shopping on one of many Alibaba’s platforms. “The move targets microtraders in Kenya who source goods and other supplies from manufacturers in China,” Safaricom said in a press statement.
South African payments firm, Wizzit provides micro-finance products to more than seven-million people in 13 SSA countries since its formation in 2004 in partnership with the World Bank Group. Its customers can obtain micro-loans via cellphones for either private or business use.
Zoona, Zambian-based mobile payments firm with a customer base of two million has processed more than US$2bn in transactions since it launched in 2009. It has built a distribution network of Zoona Agents in 10 countries (mostly in southern Africa) to convert electronic value to cash and vice versa, in high-traffic areas such as bus stations, markets and shopping centres.
Source: IMF Financial Access Survey