There is a lot of buzz about how FinTech technology is already transforming areas like the traditional banking industry, with even more potential to grow. However, FinTech technology also has a lot of applications in less developed areas where there may be less access to banks and other financial institutions, like what is available in the United States. 80% of adults in Africa do not have access to banking services, leaving the majority of the continent unbanked. This type of aspect to Fintech in developing countries is very beneficial, as waiting for traditional banking infrastructure to become widely available would take longer than the more accessible route of adopting Fintech solutions. Specifically in Africa, this opportunity not only gives individuals access to bank accounts, but implements banking infrastructure and services for a market that would otherwise not be able to interact with a bank. One of Kenya’s prominent Fintech uses is a mobile wallet called the M-Pesa. Over 50% of adults in Kenya own this type of account, and surprisingly the transaction volume on the system is roughly equivalent to up to 50% of Kenya’s GDP. One recent issue that is now being fixed is being able to use these money between multiple platforms and across countries with cooperation and interoperability agreements.
Link to article: http://www.iafrikan.com/2017/02/10/fintech-in-afrika-is-much-more-than-just-mobile-money-and-remittances/
It always makes me realize how different first world and third world countries are when I read articles like this one, detailing how African people do not have access to financial institutions like we do. While I agree that there is a lot of untapped potential in under developed countries, I think other assistance like sufficient and clean food, water, and other basic needs should have first priority when it comes to helping these countries.
The major benefit of financial inclusion that developing countries may gain from Fintech is definitely undeniable. I think it would be in Africa’s best interest to adjust its regulatory environment to create a more attractive hub for development of Fintech innovation.