Africa is the only continent that has truly embraced the “Mobile First” concept and is now leading and delivering breakthrough innovations with mobile technologies of unparalleled simplicity and efficiency.
A good example is what is happening in South Africa’s Fintech scene, which is experiencing significant growth and is in the fastest growing sector with 4-5% of the IDF. From an initial investment of US$15M to US$170M in 2018 alone and we are very optimistic looking at the 2019 forecast.
Most of these Fintech projects focus on mobile payment processes and banking products serving a previously unbanked population, as conventional banking are too complex and slow. We are witnessing a financial inclusion revolution.
How do we explain this phenomena?
First of all, we must take into consideration that smartphones are now in the hands of millions of Africans for their communication needs, including banking, while in Europe, America and other parts of the world banking is still very much based on the desktop experience.
The lack of banking penetration in Africa naturally forced a search for simpler and more creative solutions in financial services and in 2007 we saw the emergence of M-Pesa in Kenya and just like “magic” (and extremely simple technology) the phone become a Bank.
This quickly turned into a mobile banking case studied in universities classrooms around the world and also a wakeup call for this industry opportunities. Since then M-Pesa concept evolved and this model has been applied in other all across the continent.
Secondly, speaking about South Africa specifically, despite the country’s history of numerous cases of entrepreneurs making fortunes in the financial markets, a large portion of the population was left out of the banking ecosystem and were in need for mobile banking solutions.
Finally, we saw the appearance of technologies such as Blockchain that turned complex and slow processes into something easy, fast and reliable. With blockchain technology and its best-known cryptocurrency strand, they made South Africa # 1 in terms of owners of Crypto by Citizen in 2018.
This scenario set the perfect storm for the birth of countless Fintech Startups. Stay tuned!