The Afrikan continent is poised to experience its next big growth phase. While previous growth phases on the continent – which helped birth the "Afrika Rising" narrative – were fuelled by the continent’s natural resources and young population, this one will be driven by financial technology (FinTech).

Afrika has long been a pioneering force in FinTech, with Kenya’s M-Pesa) showing the impact of combining mobile and financial technologies.

FinTech in Afrika

That M-Pesa legacy hasn’t slowed down either. According to some reports, almost a third of funding raised by Afrikan startups in 2017 was in the FinTech sector. Given the low number of people with access to traditional banking across the region, fintech could unlock the continent’s true economic potential.

Outside of Afrika’s general fintech trends, we has seen first-hand how powerful it can be in unlocking a business’ potential. At surface level, we've also seen traditional SME-funding business made more efficient through digitising processes. But FinTech is about more than simply digitising financial service processes.

Defining FinTech

Our definition of FinTech extends to building the digital rails which accommodate a seamless customer experience, from real-time application and approval to contracting electronically. Traditional lenders are improving processes by collecting and using data digitally and also automating processes, but unless they can do it at scale, in real-time with minimum fuss from the consumer, it isn’t really Fintech.

We as a company have also applied this definition of FinTech to our own partner model. This model has seen us team up with payment players such as Yoco, iKhokha, and SureSwipe to provide funding to their customers. This funding process is fully integrated into the systems of these payment players so the customer has a seamless experience.

Doing so has allowed us to provide pre-approved offers, a real-time mobile application, a digital contract and same day disbursement. Moreover the model allows SMEs applying for funding to have a contract in as little as 30 seconds, providing them access to funding that is not available from the traditional banks.

So successful has this approach been that we have attracted funding from three development finance institutions (DFIs), including Developing World Markets. While we can’t put a specific number on how much each of the DFIs has invested, the average international funder is putting in between $2 million and $5 million per funder.

FinTech's impact in Afrika

FinTech will have a major impact on Afrika’s economy was the content at the recent AFSIC (African Financial Services Investment Conference). Believed to be the largest Afrika investment event taking place annually in Europe and one of the most important Afrika investor events globally, this year’s them was “Fintech in Africa”.

Given the high-level investment discussions which take place at AFSIC, this clearly demonstrates how much of a future fintech has in Africa.

But how can SMEs take advantage of this increased interest and acquire funding?

Role of MNOs

One of the best ways to do this is for companies to prove interest in their business model from the continent’s mobile network operators (MNOs). The MNOs are critical to the success of FinTech and financial services in Afrika as they have transaction information, mobile data as well as the rails to disburse credit and collect credit through the wallet. As the platform to get to the customer, they are constantly being approached by Fintech operators to tap into their network to provide financial services.

Grab their attention, in other words, and you’ll find it much easier to bring funders onboard. FinTech in Afrika is alive and well. With the right backing, it has the opportunity to completely transform Afrika.

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