Tayo Oviosu says that fintech in Africa looks very different from the West
Cash is still king in Africa
By Tayo Oviosu, founder and CEO, Paga
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. Fully 57% of Africans do not have a bank account, plenty of them in the larger economies. In Nigeria, the continent’s most populous country, the figure is 60%; in Morocco, 71%; but in Kenya, thanks in part to the success of M-Pesa, a popular mobile-money service, it is 18%. Cash is still king in Africa, used in 90% of all transactions.
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. This is primarily because of 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.
