David Mouko Elizaphan Omaanya
This is the blog of David Mouko Elizaphan Omaanya, Director of Savannah Technologies Ltd. and former Country Director and East Africa Head of the fintech company Flutterwave. This blog will explore many aspects of Elizaphan Mouko’s career, covering a range of topics including traditional banks vs. fintech banks, how to start a business in 2023, and the ways fintech companies are benefiting small businesses in Africa.
Fintech in Africa
Fintech offers significant growth potential in relation to the overall African economy, according to statistics shared by McKinsey. In Europe, around 134,000 jobs have been created through fintech companies, and fintechs in Europe, as of June 2022, boasted a combined valuation of approximately 430 billion euros. This figure is greater than the market capitalization of Europe’s seven largest listed banks combined.
$3.3 bn
In Funding to Fintech in Africa in 2022.
10%
Africa’s financial-services market could grow at about 10 percent per annum.
$230 bn
Africas estimated Fintech revenues by 2025.
Single platform financial service
The fintech sector has been embraced by the internet generation, and 60% of consumers, according to research by Ernst & Young, indicate that they would like to access all their financial services via a single platform.
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The Future of Banking
Fintech is widely perceived to be the future of banking and the way ahead for many financial institutions. Banks are increasingly buying fintech start-ups, while fintech start-up acceleration programs are becoming popular. Some of these programs are managed by banks including JP Morgan and ING.
Mobile Money
The use of mobile money is increasing at a fast pace in sub-Saharan Africa. According to the GSMA, in December 2020, around two thirds of the total mobile money transactions around the world were driven by users in this area. It’s been suggested that mobile money is a powerful tool to expand access to financial services within environments that are low in resources. For example, individuals can quickly transfer money at low cost without needing an existing bank account using a mobile phone.
Benefits to Small Businesses
Fintech companies are delivering many benefits to small businesses in Africa, such as the ability to use a type of credit scoring that promotes financial inclusion. For example, several fintech companies allow clients to link their bank accounts and other banking platforms to enable instant access, giving an overview of the business and opening funding opportunities to businesses that may otherwise be rejected.
Blockchain Technology
Blockchain technology is also expected to increasingly benefit SMEs in Africa and drive financial digitalization. For example, automated services, smart contracts and safer transactions can optimize supply chains and increase client satisfaction. Furthermore, mobile money operators and fintechs can simplify the exchange of funds, solving payments interoperability between the switches in different regions of the continent and between banks and payment providers.
