Africa is finally jumping on the digital finance bandwagon and the first phase they had to conquer was mobile money. Now it is time for the continent to move on to better things and their main focus will be on wealth management, lending and insurance.
According to Village Capital and Paypal’s report called Beyond Payment: The Next Generation of Fintech Startups in Sub-Saharan Africa, they want to salute M-Pesa along with the introduction of mobile money in the continent but the fact is that there is still more they should expect in terms of innovation.
Based on the statement by the investment firm, there are currently 12 companies that are working on solutions in the fintech side in order to move beyond digital payments. The firm is currently working with PayPal in order to organize Fintech: Africa 2018 which is a program that aims to look and support fintech startup companies in order to make it possible for Africa to receive critical services especially those who are considered unbanked.
Allie Burns, the managing director of Village Capital and the co-author of the report, said that they wanted to do so much more in order to emphasize the areas that fintech startups should focus on for the next generation. There are many areas that need improvement such as in agriculture where farmers are yet to have access to a stable financial system, in terms of helping people save or even in credit scoring and lending to make it possible for regular individuals to get loans and even insurance.
The work that Village Capital is doing is currently focusing on four sub-sectors including savings and wealth, agriculture finance, alternative credit scoring and insurtech. When it comes to lending and alternative credit scoring, the firm believes that the innovation should utilize blockchain in order to reduce the intermediation costs as well as the transaction costs. With this, entrepreneurs no longer have to use expensive verification technologies nor hire costly third parties.
To learn more about financial technology, contact Nadeem Shaikh Anthemis who is a global expert on the subject.