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Fintech in Africa: Kenya


A People Consultant supporting technology startups in developing their teams and organisational growth. He also conducts research into Digital Finance. He is currently reviewing financial sectors of the EU-28 countries.

Unlike in the Western countries, fintech in Africa have been led by telecommunication firms who have leveraged their large and dispersed networks to reach the un- and underbanked. As a result of the term often used is “mobile money”.

As the term clearly suggests, subscribers of these services store ‘value’ or ‘credit’ which may then be topped up, debited or transferred to other users. Their devices function as simple debit accounts or more commonly known “money wallets” or “mobile wallets” and allow users to make payments for a range of items including utilities, rent, school fees, online shopping, government payments and more.

For this article, we’ve chosen to focus on three unique financial markets from around the continent at various stages of advancement: Kenya (the epic-centre for fintech on the continent), Ghana (a very stable country with a steady rise) and Morocco (an often overlooked nancial juggernaut, just entering ntech).

>> Kenya

Kenya is well-renowned as the birthplace of the giant mobile money transfer entity known as MPESA which has revolutionised the way people handle and think about money. It is a mobile money payment platform that allows users to make P2P payments by sending a text message. Users can deposit, send and receive money as well as pay for goods and services from their mobile phones. The service has been lauded for its convenient remittance of money through a cashless system and continues to spread to other countries. It has also been integrated into platforms like woo commerce. In just three years after its inception in 2007, MPESA was being used by 70% of the households in Kenya and covered 50% of the poor population found in remote regions.

According to a financial report released by Safaricom, which is the service’s parent company, on September 30th, 2017, MPESA’s revenue grew by 16.2% to 30.05 Billion ($290.4 million). In June 2017, MPESA introduced a new product known as M-PESA 1 tap. The solution allows users to simply tap on a near-field communication (NFC) card, NFC enabled wristband or phone sticker and thereafter the user would be prompted for their MPESA PIN number and the transaction would be over in less than a minute. In 2016, Safaricom launched a mobile application called mysafaricom app for smartphone users that allows users to access all Safaricom and MPESA services and later introduced scanning QR codes as a payment option.

In the banking sector, banks have not quite capitalised on the fintech sector. This was partly caused by the capping of interest rates set by the Central Bank in 2016. It in-turn led to a further reluctance by banks to extend credit to small businesses, high-risk clients and small savers. Banks and other financial institutions are still playing catch up to MPESA. However, it’s important to note that most banks have partnered with MPESA to allow customers to access banking services straight from the comfort of their mobiles.

In Dec 2015, The Central bank of Kenya put a disclaimer on bitcoin and other forms of virtual digital currency terming them as unsafe and risky. The bank questioned their unregulated nature, instability in value and transactions which largely remain anonymous and untraceable. This has dampened not only Blockchain and cryptocurrency penetration in the country, but also innovation within this space. It remains to be seen how Kenyans will use this technology to disrupt their financial sector further.


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