Technology

Missing links as fintech adoption in Africa grows

money

The fintech sector in Africa over the past 24 months has received the lion’s share of investor attention and coins. PHOTO | SHUTTERSTOCK

Summary

  • The fintech sector in Africa over the past 24 months has received the lion’s share of investor attention and coins.
  • Simplified, this business model is taking a rake out of tens or hundreds of services, mostly remittance, utilities and payment processing.
  • The existing hurdles are culture, currency, and logistics, which have many solutions to address them. The biggest one, for which a greenfield opportunity exists, is that of trust.

The internet and the mobile phone have made the world a village. The idea of six degrees of separation, defined on Wikipedia as the proposition that all people on average are six or fewer, social connections away from each other is becoming a reality for 7.9 billion people, even for those currently considered offline.

Of the top 10 companies globally, five are technology-focused, linking people socially via connected devices.

The sector count comes to seven when we include Amazon and Alibaba. They go deeper into some verticals like commerce while still having a technology core offering.

Where people congregate physically or digitally, markets eventually develop. In the past, market exchanges were secured by the buyer and seller being physically present for the transaction.

The interconnectedness that we now have and access to information via the internet has changed this dynamic.

A buyer from one part of the world can see the product range from a seller on the polar opposite side and initiate an exchange. The existing hurdles are culture, currency, and logistics, which have many solutions to address them.

The biggest one, for which a greenfield opportunity exists, is that of trust. How can I tell that a seller, hitherto unknown will deliver? On the other part how can I know that a buyer is genuine and can pay for the product?

The fintech sector in Africa over the past 24 months has received the lion’s share of investor attention and coins.

Unfortunately, there seems to be a template, from which most are reading, predicated on being marketplaces, and I am trying hard not to use the term ‘super-app here.

Simplified, this business model is taking a rake out of tens or hundreds of services, mostly remittance, utilities and payment processing.

My opinion is that this copy-paste mentality is our greatest undoing making us miss the forest for the trees, unable to see the bigger potential of the ingredients that we have available such as mobile money, activated agent networks, open banking, blockchain, millions of MSME and hustler type businesses with their long tail of consumers.

A sneak peek into the pan-African potential is to look at the numbers that mobile network operators and top crypto exchanges are pushing and read between the lines.

Njihia is the head of business and partnerships at Sure Corporation | www.mbuguanjihia.com |