Fintech Report: The disruptive new kid on the bloc in Africa
It is greatly reducing the cost of transferring money and giving hundreds of millions of people access to financial services for the very first time. Africa is different to most of the rest of the world in that new technologies don’t have to displace existing options, such as credit and debit cards, in most instances, because they are currently little used
Most simply, fintech is merely an abbreviated form of the term financial technologies but it is now most often used to refer to disruptive technologies; that is, those with the potential to completely revolutionise the way banking and the financial services industry operate. Most fintech developers are small startups.
They usually have very low operating costs but often require an injection of capital to really make the most of their potential. This can mean crowd funding (although that phenomenon is only just taking off in Africa), venture capital financing, or mentoring by larger companies or entrepreneurs.
Estimates vary but fintech is generally reckoned to attract about 30% of all investment in African technology. Marketing products is easier than ever for developers, while it has also never been easier for customers to take advantage of fintech offerings.
Photo courtesy of Eric Hersman.