It is now thought that the rewards far outweigh the risks in regards to investment in financial technology on the continent of Africa. Though great challenges remain, including issues ranging from the political to the practical, analysts see the potential African consumer base as burgeoning and, potentially, lucrative on a dramatic scale.
Access to the internet and the prevalence of mobile coverage means that many large corporations, including Vodafone and Orange, are thought to be investing in financial technologies in various parts of the continent. M-Pesa, the Kenya-based fintech operation that launched in 2007, has partnered with Vodafone and the African subsidiary Vodacom to offer mobile solutions for banking customers, largely in Kenya and South Africa, and has blazed a trail that companies large and small are hoping to expand upon. Orange, for example, set up operations in Ivory Coast in west Africa in 2008, but has applied for additional licensures in support of mobile money operations.
An emphasis on start-ups is quite evident, as numerous government-backed and industry-sponsored events have hosted new companies that are seeking to claim their share of the expanding marketplace. Just last month in Johannesburg, the African FinTech Awards were held, recognising start-ups in fields as diverse as retail banking, payments and transfers, and block exchange.
Though the infrastructure many industry leaders, as well as start-ups, need is often missing, and though it is the case that the red tape, security, and level of risk associated with each African nation is different and often complicated, it is predicted that links between telecommunication firms and technology providers will grow, and the customers of Africa will become more and more reliant on their devices to handle monetary transactions. If these predictions prove true, the financial incentive to invest in the continent will grow exponentially.
By Keith Sonia