The island nation located in the Indian Ocean has been visionary with its approach to fintech and wider digital. So what have been Maruritius’ developments in 2022?
As highlighted in The Fintech Times Fintech: Middle East and Africa 2021 Report, Mauritius has transformed itself to be an upper-middle income country, boasting one of the highest gross domestic product (GDP) per capitas (second after Seychelles) in the African continent. Acting as a gateway between the rest of Africa and South Asia with its location in the Indian Ocean, its economic development transformation continues with its Mauritius Vision 2030.
With its own economic development strategy, by 2030 it aims to join the high-income countries through its political stability, resources and its gateway between Africa and Asia. As is with other strategies, a focus on highly-skilled employment, infrastructure and digital are key components to help take the country to 2030.
Mauritians have a 155.25 per cent mobile penetration, as well as a 133.9 per cent internet penetration rate, according to the Mauritius Economic Development Board. Compared to much of the rest of Africa, the internet penetration rate is quite high.
To note, Mauritius is also unique as many of its citizens are both French and English speaking, which helps it cater to much of the world. Generally in its financial services sector, the nation is recognised to be well-developed and well-capitalised with its banks, often noted as being one of the highest in Africa. The country has been working hard to not only make itself investor friendly but also to comply with global standards.
The year started off on a positive note with the East African nation when the European Union (EU) this year confirmed on the 7th of January that it finally removed the country from its list of “high-risk third countries” following measures that the government have done to improve its anti-money laundering (AML) and combatting the financing of terrorism (CFT).
In terms of financial services as a whole, according to Mauritius Economic Development Board, the sector contributes 13 per cent to the total gross domestic product (GDP) in the country and employs over 8,600 people. The ICT/business process outsourcing (BPO) industry represents a key driver of the Mauritian economy with a GDP contribution of 7.4 per cent for last year and employing around 30,000 people with over 850 companies in the sector.
Its drive explains why much of its initiatives have been very much legislative based. For instance, Mauritius is among the first countries in East and Southern Africa to adopt a comprehensive legislation on virtual assets and initial token offerings – with the Virtual Asset and Initial Token Offerings Services Act 2021; this came into force February 7th this year.
From the Mauritius National Budget 2021-2022, there were a series of measures that were highlighted that would ultimately boost economic development and key ones pertaining to fintech and wider digital implementing that. First, this included setting up of an Open Lab by the Bank of Mauritius (BoM) for banking and payment solutions, in addition to the establishment of Fintech Innovation Lab by the Financial Services commission (FSC) that will help ultimately boost entrepreneurship. Second, the BoM announced a pilot rollout of a Digital Rupee, a central bank digital currency (CBDC).
It was also confirmed in the Mauritius National Budget 2022-2023, where it was highlighted that “The Bank of Mauritius Act will be amended to clarify that the BoM may open accounts and accept deposits from persons for the purpose of issuing digital currency. Further, various acts including the Declaration of Assets Act will be amended to cover virtual assets.”
Also, on the 10th September last year, the FSC released “the Financial Services (Crowdfunding) rules 2021.” The aim of this new regulatory framework of crowdfunding is to improve access to finance for individuals in addition to entrepreneurs and Small and Medium Enterprises (SMEs) operating in or from Mauritius.
To reminisce, the Mauritius fintech ecosystem got much of its current spotlight from 2018 with the establishment of the ‘Fintech and Innovation-Driven Financial Services Regulatory Committee’ for the expansion of Fintech in Mauritius. Later, to help promote fintech in the country, the Mauritius African Fintech Hub (MAFH) was set up the same year. In 2016 it was an early adopter of MEA with regards to a regulatory sandbox by issuing the regulatory sandbox licence.
Subsectors in Mauritius in fintech include payments and processing, remittances, blockchain and cryptocurrencies, security and fintech tools.
In terms of the wider ecosystem, accelerators, incubators and co-working hubs active in Mauritius include besides Mauritius African Fintech Hub the likes of Co-Working Port Louis, The Group, Anglo African, and Verde – to name a few. The 19 banks in the ecosystem include the likes of ABC Banking Corporation, AFRASIA, Century, Bank One, HSBC and Barclays – to name a few.
The island nation of Mauritius has a bright future, with fintech playing a strong role in that.