Fintech: Africa welcomes emerging fintech startups
Given financial technology is about smart, innovative, flexible start-ups looking to eat away at traditional financial firms’ intermediary roles, it is not surprising that Africa, with its woefully inefficient banks and sclerotic infrastructure, is feeling the full force of the fintech wave.
According to industry players, there is a hive of fintech activity now in most major capitals of Sub-Saharan Africa.
Kenya has been probably the most successful centre for fintech ventures, starting with Kopo Kopo in 2012, which was Africa’s first major fintech iteration of a vanilla mobile payments business, and which received Silicon Valley investment from Javelin Venture Partners. Kenya now has at least 38 fintech companies operating out of Nairobi.
One of the continent’s first hubs was iHub in Nairobi, which was launched in 2010, which has an incubation arm focused on mobile technology, called m:lab. However, as The Economist notes in a recent piece about the difficulty in developing incubators in Africa, “m:lab, like many of its kind, is not a real incubator: it was founded with grant support from the World Bank and takes fees from, but not equity in, the companies that it nurtures.”
BitPesa, a universal payment and trading platform for Africa, was also started in Nairobi in 2013, and has since expanded rapidly across the region into Uganda, Tanzania, the DRC and Nigeria – “making us well connected to partners across the industry”, says Elizabeth Rossiello, co-founder and CEO of BitPesa.