Africa is at the edge of FinTech innovation and a lack of financial inclusion, and COVID-19 has increased the stakes of getting the policy environment right for increasing access to finance.
On July 23, Devex and the Milken Institute hosted a live, free-flowing ‘coffeehouse-style’ conversation about financial inclusion and FinTech within the context of the COVID-19 pandemic. The discussion was moderated by Raj Kumar, President and Editor-in-Chief at Devex, and Staci Warden, Executive Director for Global Market Development at the Milken Institute, and featured Iyinoluwa ‘E’ Aboyeji, Founder of Flutterwave and General Partner at Future Africa; Elizabeth Rossiello, Founder and CEO of AZA; Evans Osano, Director of Capital Markets Development, FSD Africa; and Darlington T. Mandivenga, Group CEO of Cassava FinTech International.
A few key takeaways from the conversation:
- About two-thirds of Africans still lack access to formal banking services, but at the same time 44 percent of global mobile money transactions take place in Africa.
- FinTech tools and a startup philosophy of automation, scale, agility, and iteration have helped new entrants come into markets and compete with traditional players and large banks.
- COVID-19 has drive blue chip customers to FinTech firms as the pandemic has revealed weaknesses in incumbent business models and assumptions.
- The African FinTech sector has moved beyond mobile payments to more value-added services, including asset-backed lending and wealth management.
- FinTech is enabling the shift to work-from-home — and also enabling Africans to earn in foreign currencies from work with global multinationals and spend at home in local currencies.
- Data is a now an asset households and SMEs have for accessing credit, but realizing this potential will require investments in infrastructure and digitizing paper records and registries.