A January Fintech Retrospective on the African Ecosystem.
Emerging trends and what it means for the next 11 months.
Is it too late to wish you a happy Valentine😻, hope you spent the day well?
In today’s article we’ll look back at the news in January to make sense of all that has gone down so far in the African Fintech Ecosystem. If you’ve been keeping tabs, it is a lot! Let’s jump right in.🦘
News Roundup per Region
- First up is Kenya
If there was any country that was really active in the Fintech scene last January, it was Kenya. The Government was all out, so were the banks, the SACCOs, Google ….in fact everyone!
Starting with the eCitizen platform: the digital payment platform launched by the government which digitizes 13 different social services. It’s not the 1st time it was launched and there are still a few things to stabilize, but it is a good one nonetheless. Then we heard that Kenyan Banks had stepped in front of the monopoly lines to launch their own Mobile money offerings. In a world where ChatGPT is challenging the revered Google search engine, this is a welcome development.
The SACCOs were not left out of the gist, they pulled out their whiteboards and mapped their own strategy. They’ve connected to the Kenyan National Payment system to roll out their lending offering.
A note to the Big fintechs in Africa, the cheese 🧀 isn’t moving, it has been moved.
Google in collaboration with the CBK also moved to sanitize the Digital credit space. So far, less than 10% have been given the green light to continue operations. We have more news on betting, fees etc.. but this is becoming too long for a roundup. We did a deep dive on the Kenyan Fintech in our free newsletter — subscribe to read here .
2. Then we move to Nigeria
Nigeria wasn’t left out of the downpour of updates. We are wondering what to spotlight 🔦 and what to leave out. But no one should be surprised as 4 key announcements happened at the turn of 2022. New naira notes were released, a deadline for old naira notes was given, a reduction of the cash withdrawal limit was also stated and last but definitely not least — a new domestic card scheme AFSL and a new card AfriGo was launched.
Yes.. all this in about 7 weeks.🤯
They are all in various stages of implementation albeit fraught with challenges. Nigerians are resilient and are exploring alternatives to make sense of the resulting cash shortage compounded with fuel queues.
All eyes are on the Presidential polls set for next week. Whoever wins will set the stage for a lot of these projects and how the rest of the year turns out.
3. Holla Egypt!
Egypt braced the tape to deliver the 1st African Fintech Unicorn for 2023🍾 . MNT-Halan joins the league of Opay, Flutterwave, Chipper Cash and others representing the continent on the international unicorn map. Also from Egypt, we had an acquisition: Underlie was fully acquired by UAE-based Fintech Galaxy .
January wasn’t without its challenges as the historic country experienced FX concerns with its currency spiralling downwards. About the turn of the month, we woke up to the Egyptian pound being listed on the Russian exchange list. We hope to see the effect of this on cross-border transactions in the coming months.
4. Finally, we look at South Africa
A lot of the Blockchain + crypto-related news came from SA in January. The year started out with Centbee announcing their raise, followed by Fraxeum rolling out their blockchain platform focused on Financial Inclusion. Later on Yellow card, the crypto-exchange launched a payment feature. We were not surprised when the ARB released a new clause for the cryptocurrency industry aimed at protecting consumers from unethical advertising. Guys, if you are working on a crypto product in Africa, you should have eyes on South Africa.
As we round up this section, Take a look a the news highlights from the week ending on the 5th of February 2023.
Spotlighting Trends that could shape the rest of the year.
So what is the takeaway from all these, what trends are forming, and what shifts should we be aware of? We’ll discuss 3 of them in this section. Take a look.
A. Regulatory driven Payment platforms:
The news from Kenya , Nigeria and even South Africa with the RPP system shows that regulators do not want to be left to policy-making only. They are taking central positions controlling infrastructure and payment methods. A few things might be the reason for this
Russia and Ukraine: Enough said. But to add: It’s not like anyone is planning to invade their neighbors soon( we pray not), but no one wants to be left at the mercy of Visa, Mastercard, and Swift when key decisions need to be made on the continent.
Secondly, taking learnings from the RBI in India, perhaps these regulators have seen that they could get a decent share of the pie by being in charge.
If it helps African leaders take fewer loans from the IMF and other forms of aid… why not?
B. Intercontinental Fintech Expansion
One thing we didn’t see is the spate of International expansions and partnerships. We had 3 major ones just in January. TeamApt or should be we say Moniepoint led the way, changing their name as well as their headquarters to the UK. Kuda is in the last stages of getting a digital banking license in Pakistan and Flutterwave is eyeing an acquisition in the UK.
African Fintechs were always told to build for the world and these guys are leading the way.
We also think it is a risk management + business diversification move.
The FX concerns on the continent have kept many Fintech leaders awake at night. Time to stop the insomnia and get to execution. Bravo!
C. Focus on Regulations
Fintechs are taking regulations seriously , not like they haven’t before, but if 2022 taught VC and PE firms anything, it is that leading indicators of failed investment can be spotted from a lack of adequate licensing governance.
Digital Lenders in Nigeria and Kenyan have been forced to comply. Also in Nigeria, we have seen 2 Payment Service Holding Company licenses issued to Chams and Interswitch. There is reason to believe more is on the way. Chipper Cash also copped a VAS license in Malawi and a lot more PSSPs were licensed in Nigeria.
Let’s hope this gives the investors the confidence they need to thaw out the funding winter. What do you think, let’s know in the comments.
At The PaymentLogue, we are enabling a skilled Fintech ecosystem, we have comprehensive resources and expert guidance that will help you stay ahead of the curve in an ever-changing financial landscape. Let us be part of your Fintech learning journey in 2023.
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If you’ll like to explore that, send an email to info@thepaymentlogue.com.