How African Financial Technology Is Moving Beyond Payment Services
If mobile money was the first phase in the development of digital finance in Africa, the next phase of digital financial services on the continent will focus on lending, insurance and wealth management. In “Beyond Payments: The Next Generation of Fintech Startups in Sub-Saharan Africa,” the venture capital firm Village Capital, and their reporting partner, PayPal, tip their hat to M-Pesa and mobile money in Africa, but say that there’s a wave of innovation still to come.
The investment firm identified 12 companies it determined were “building solutions in fintech subsectors outside of payments.”
In partnership with PayPal, Village Capital has set up Fintech: Africa 2018, a program that seeks to find and support startups bringing other “critical services” to Africa’s unbanked populations.
From Tech Crunch. Story by Jake Bright.
“We can’t do enough to highlight what the next generation of fintech startups will and should be driving… whether it’s in agriculture — helping farmers have access to the financial system — through alternative credit scoring and lending — so people can actually get access to loans or insurance — or building savings and wealth,” Village Capital managing director and report co-author Allie Burns told TechCrunch.
Village Capital’s work gives a snapshot of these four sub-sectors — agricultural finance, insurtech, alternative credit scoring and savings and wealth — including players, opportunities and challenges, recent raises and early-stage startups to watch.
In alternative credit scoring and lending it sees blockchain as a driver of innovation in reducing “both transaction costs and intermediation costs, helping entrepreneurs bypass expensive verification systems and third parties.”
The report highlights recent raises by savings startup PiggybankNG and Nigerian agtech firm FarmCrowdy. Village Capital sees the biggest opportunities for insurtech startups in five countries: South Africa, Morocco, Egypt, Kenya and Nigeria.
Read more at Tech Crunch.