5 Reasons Fintech In Africa Is Different From The Rest Of The World
African fintech is not disrupting anything
Whereas in developed economies fintech is disrupting traditional banks and financial institutions, in most of Africa it is disrupting nothing at all. There is nothing there for it to disrupt. In developed countries, the formal banking system is very widespread, with physical bank branches available in every city, town and village. This is not the case in most of Africa, where it has not been financially viable for banks to offer last-mile services. South Africa’s highly-developed financial services sector is the exception rather than the rule.
Fintech startups in Africa, then, are building a whole new infrastructure rather than disrupting an existing one. Mobile wallets are functioning as bank accounts; there will never be a need for most Africans to adopt traditional banking services. And these mobile wallets are then creating access to other financial services, such as insurance and loans. An example is MFS Africa which has connected 80 million mobile wallets in Africa, enabling cross-currency, cross-border, cross-network payments through entirely new infrastructure. This is the exciting thing about the fintech revolution in Africa. It is building an industry from scratch.