Fintech has taken off as a major buzzword since around 2014 and this form of disruptive technology will change the way we access and transfer our money.
In Africa mobile payments for example have revolutionised the financial sector with a majority of people having access to mobile devices and about a third having bank accounts has made sending payments electronically easier than ever before.
Companies such as M-Pesa from Kenya (a money transfer system which used across the continent) have changed the way the likes of customers and investors manage their transactions.
So who else is championing fintech in Africa?
- Zoona – Zoona which translates as ‘It’s real’ in Nyanja (one of the main languages spoken in Zambia) like M-Pesa, operates a cellphone-based money transfer service and has really helped both Zambians and Malawians who a) don’t have a bank account and b) caters for remote places and works with old mobile devices.
- Aella Credit – Nigerian fintech company Aella Credit is a personal loan lender that underwrites loans with a proprietary algorithm. According to Techpoint.ng, the tech-powered online lender, is closing in on a $8m funding round with a consortium of US based investors and debt funders.
- GetBucks – The South African start-up gives customers access to short term loans and other financial products, without having to travel to a bank branch.GetBucks uses a combination of traditional credit scoring and artificial intelligence when looking at the credit risk of low income consumers.
- SnapScan – SnapScan from South Africa allows customers to pay retailers and stores for products and services using their mobile devices instead of debit, credit cards or cash. The app is available on iOS, Android, and Blackberry devices and users need to download it then take images of their credit cards and create a pin number for the accounts.
- Paga – The mobile money transfer service from Nigeria was founded in 2009 but started operating in 2011 after receiving its operating license. Paga users can pay bills, transfer money, access banking services and other financial services from a simple swipe from their mobile devices.
There are quite a few more fintech companies across Africa that are also doing some remarkable and innovative ways of transferring payments electronically and the fintech industry can without a doubt influence other sectors such as education and healthcare.
Africa is not on the same level as continents such as Europe when it comes to fintech, however, Africa is definitely at a unique point in time it’s able to grab the opportunities more than any continent because of the rapid growth of digital connections and because of its youth (as mentioned in a recent CNBC Africa article).
In order for fintech to continue its innovative presence the younger generation are key, Africa is known for having a younger generation compared with other continents which makes them more likely to be tech savvy.
Funding has always been an issue in Africa and there is a lack of funding when it comes to innovating new technology. On the flipside, it can be said that despite the lack of funding, many start-ups have not seen it as a barrier and have looked at other avenues of utilising financial technology (as the company examples above show).