AFSIC – Investing in Africa is believed to be the largest Africa investment event taking place annually outside Africa and has become one of the most important conduits of investment into Africa. ARYZE will be part of a crucial debate taking place in AFSIC on the 12th of October 2021 at the Park Plaza Westminster.
There is a variety of foreign countries looking to expand into the African continent and evidence of this is the important influx of capital from both local and international investors received by the African startup market from both local and international investors. In the African continent, 54 countries are home to 1.3 billion people, with a growing young workforce that is eager to thrive and represent a significant untapped market for foreign investment.
An example of this exploding market of innovation in Africa is a company like Coronet Blockchain which provides blockchain vetted commodities such as human hair extensions, hair care products & salon equipment to African salons, distributors & retailers from ethical global manufacturers at lower sourcing costs Using the IBM Blockchain to enable its operations
AFSIC: navigating the African fintech space
In Africa, the Fintech industry is an emerging force on fertile ground. Relevant information suggests Fintech is the most dominant component of Africa’s startup space, with most of the startup funding over the past four years flowing into this sector. Disrupt Africa, a web platform for news on African startups, reveals that for the past six and a half years, these startups have raised about $900 million, more than twice that is raised by startups in any other space over the same period. Statista steps in with data showing the distribution of African Fintech Startups to be that, as of 2021, 154 fintech startups are located in South Africa; which has the highest number of such companies in the Africa region. Nigeria followed closely with 144 Fintech startups, while the other 93 had headquarters in Kenya. Together, the three countries harboured over 65 per cent of African Fintech, which in total amounted to 576 companies by the same year. It must be understood, however, that the promising future of Fintech in Africa today would not have been possible without forerunners such as Mpesa and Ecocash, founded in 2007 and 2011 respectively.
The role of connectivity for financial inclusion
Digitalization plays a crucial part in achieving financial inclusion. The UN estimates that there is a prize of 12 trillion USD for the private sector for achieving the SDGs, proving that companies can do well by doing good. Digitalization, connectivity and access to financial services go hand in hand when it comes to securing financial inclusion and providing social mobility through participation in the financial system rather than exclusion.
Several African countries have expanded financial inclusion via non-bank mobile money. Probably the most known successful example is MPesa in Kenya as the largest mobile network operator in the country with operations in Tanzania, Mozambique, DRC, Lesotho, Ghana, Egypt, Afghanistan, South Africa and Ethiopia. But what has been the key behind the success of MPesa? proper implementation roll-outs and sound regulatory frames that allow the industry to grow rather than stifle it.
Countries like Kenya and Ghana have seen great growth and success through implementing a telco-led financial inclusion model in which banks and Telcos work together to drive innovation. In the same way, fintech should work with banks and Telcos to advance an inclusive agenda powered by economic growth in the region.
Telco-led Versus Bank-led financial inclusion models
Ghana’s decision to have a Telco-led financial inclusion model resulted in a 73 per cent increase in registered mobile money customers in just one year, according to World Bank data, an initiative that lifted the financial inclusion rate in the West African country to 58 per cent in 2017 from 41 per cent in 2014. Kenya has over 60 per cent mobile money service penetration, while Ghana has about 40 per cent service penetration, but Nigeria with a lot more population remains at 1 per cent owing to its bank-led financial inclusion model. The underperformance of Nigeria in this essential area for financial inclusion can be remedied by creating stronger collaboration between regulators, banking, telcos and the fintech space. Regulatory responses often have a significant impact on the success of innovative services and flexible regulatory approaches may be more appropriate for mobile payments.
ARYZE & Africa
Our very own Morten Nielsen (CFO, ARYZE) will be speaking at AFSIC on African Fintech going global and the role which ARYZE can play in Africa, contributing for the economic growth of the region and promoting overall financial inclusion. ARYZE will soon launch Digital cash, a full-reserve stablecoin that is backed by government assets 1=1 making it the closest thing to a CBDC without it being issued by a central bank. If you are London and work for a banking institution or crypto exchange, we would love to have a word with you. Tickets to the AFSIC conference can be purchased here.