Over the last decade, we have witnessed drastic changes in the financial landscape. Many aspects of payment, investment, data security and even types of currencies have changed. During this time, the term ‘Fintech’ became very popular and has been a game changer.
Though Africa is considered among the poorest continent in the world, things have changed positively through the use of financial technologies. According to United Nations report, it has been estimated that there will be an increase in the Economic Growth of Africa from 3.5% to 3.7 % in 2019. The Fintech have played a crucial role in the following countries: Kenya, Nigeria and South Africa. Other African countries are following up by embracing Fintech too.
Tech Trend in Africa and Impact in the lives of people
One of the main objectives of Fintech is to give customers more accessibility to financial services with the use of smart phones. Eight years ago, internet penetration rate in Africa was about 13.5% and today it is 35.9%. This incredible growth of about 22.4% indicates that there has been an increase in the number of users. For instance, in Kenya internet users went from 200,000 in the year 2000 to 19.6m in the year 2018 respectively.
Fintech was marked as a momentous change in 2007 when Africa’s most popular and successful Fintech, M-Pesa was established. M-Pesa had a great impact in the lives of millions of the Africans. For many people, especially those from the rural areas, have been deprived access to the services provided by the banks; i.e. they have been excluded from the traditional banking system and thus, using the services provided by Fintect companies. The issue is not only that the unbanked people find it hard to access the utilities and services, but also carrying huge sum of money such as wages, is really unsafe in some parts of Africa.
Mobile Money is an obvious example, considered as one which has had a direct impact in Kenya’s economy. As per recent surveys, 96% of the Kenyan households uses M-Pesa app and along with other fintech companies, help in transforming not only the lives of the Kenyan people but also the economy as a whole. Poverty alleviation and also enabling women to move from farming into business are the changes that fintechs brought for the betterment of the African’s economy.
Fintech in Africa is a major contributor to its increasing GDP and diminishing rate of poverty. With the increasing use of mobile phones and internet penetration, more people will have access to financial services and taking into account the recent studies that Africa has one of the youngest population across the globe, their appetite for tech innovation are unlikely to diminish.
Collaborating with NanoBNK
In line with the study above, it has been observed that Fintech has brought a new hope and dimension to the African market. NanoBNK is a bank led model, as we believe that instead of competing with the banks, we can both address the financial inclusion challenge. Therefore, our business model is unique whereby we take care of the Technology, Onboarding and Engagement of the financially excluded and the local banking partner assists with regulatory issues, capital provision and marketing.