Financial technologies landscape has propelled rapid growth in Africa as well as fueling financial inclusion, positively impacting on economic development. With a huge proportion of Africans under-banked coupled with rapid mobile penetration, these factors set a fertile foundation for Fintech growth in Africa. With the growth of Fintech in Africa, the country is more connected with financial products and this propels to business growth is access to finance become cheaper and flexible.
Fintech and Financial Inclusion in Africa
A large workforce available in Africa helped in to create a pool of developing skilled talent, required to supplement the growing FinTech sector in their countries. Banks and financial institutions are contributing in improving financial inclusion rates across Africa backed by Fintech technologies which have the ability to deliver financial services at lower costs with a greater area coverage.
Fintech potentials such as virtual assistants in banking create possibilities for remote banking assistance accompanied with lower cost, to serve a larger share of the African population in remote regions. Moreover, Fintech gives rise to the digital bank which uses artificial intelligence to interact with its customers online and via kiosks rather than human beings at call centres or branches. This enabled more African people to be connected to financial services creating the opportunity to do business with fund access more easily.
Accordingly, with Fintech, the financial value chain is less complex with more rapid and precise decision making. This creates avenues for new value propositions including flexible products and personalize products to serve low-income customers thus improving customer experience and increase engagement in the financial sector propelling economic growth.
Furthermore, with more people included in the financial system, Fintech give opportunities to include easier digital identity verification, collaborative customer due diligence, data sharing, and payment schemes—that can catalyze a host of financial services.
Fintech has emerge and solve the unbanked issue for African citizens with digital-banking space and other features providing easier access to funding. Physical presence of bank branches is not required as digital support and service the customers. Under the digital environment back by Fintech access to micro-lending, it allows users to acquire instant loans on their mobile phones via SMS (short message service).
Outlook: More to come from sub-Saharan African fintech
Payment solutions will continue to dominate the African fintech sector until the need for financial inclusion is sufficiently addressed. Smaller segments such as financial e-marketplaces, aggregators and “investech” will expand their footprints, as consumers shift their attention to solutions that satisfy other previously underserved financial needs.