Tayo Oviosu, founder and Group chief executive officer at Paga Communications, a Nigerian mobile payment company, has said Africa will see more significant partnerships among fintechs and accelerating offerings to consumers and Small and Medium Enterprises (SMEs).
He made this known in a recent interview granted the Economist, a global media and information-services company.
“Startups will focus on smaller, more niche, opportunities that build upon the infrastructure already created. For example, a company such as Doroki or Yoco, looking to emulate Square, a small business payments platform, does not need to reinvent the wheel on core payments infrastructure, but can instead use the digital pipes laid by other businesses.
“This way, resources can be focused on the needs of the SMEs being served,” Oviosu said.
The entrepreneur added that the same is true for companies providing a variety of consumer opportunities. “As we have seen in Asia and Latin America, there will be an explosion of startups that build upon the fintech infrastructure created over the past few years in Africa.
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“This will help create more jobs and accelerate economic growth. An exciting future, built on the transformative impact of fintech, awaits Africa,” he said.
Africa is the world’s second-largest and second most-populous continent, yet it remains more than a decade behind the rest of the world in financial services.
According to the fintech expert, 57 percent of Africans do not have a bank account, plenty of them in the larger economies.
“In Nigeria, the figure is 60 percent; in Morocco (71 percent); but in Kenya, thanks in part to the success of m-Pesa, a popular mobile-money service, it is 18 percent. Cash is still king in Africa, used in 90 percent of all transactions,” he said.
He said African banks have been trying to deal with the problems of access to finance and the use of cash but have not been successful at retail banking due to inefficient banking processes that do not make it easy for ordinary people to use them
“In some countries, the regulatory requirements for banks make it expensive to serve African consumers with low earning power. GDP per person in Africa is the weakest of any continent.
“This is where fintechs have stepped in with innovative approaches that can serve a mass consumer base at lower cost,” Oviosu added.
