Viewpoint: Fintech in Africa: Reshaping the Financial Sector
By Alexander Ayertey Odonkor
In the last decade, the impact of financial technology (fintech) on Africa’s financial sector and other key sectors has been phenomenal. As a key driver of growth in the region, fintech is a viable alternative to traditional banking in urban and rural areas. In Africa, fintech creates an enabling environment that opens up the financial sector’s value chain and promotes efficiency gains. Across many countries in Africa, fintech is improving financial inclusion and stimulating innovation and productivity in major sectors, such as the small and medium-sized enterprises (SME) sector and the agriculture sector, the backbone of the region’s economy.
For instance, in Egypt, North Africa’s largest banking sector and banking powerhouse for more than a century, fintech is an indispensable component in scaling up financial inclusion in the country. For banks in Egypt, advancement in fintech reduces operation costs and increases their customer base efficiently. The reliance on fintech augments the capacity of the banks, as they are able to extend digital banking services to the country’s large and dispersed population.
Photo courtesy of International Maize and Wheat Improvement Center.