Financial technology is nothing new in Africa. The use of digital means for many financial transactions is something that’s well known in Africa. However, at the Afro-Asian Fintech Summit in Nairobi, Kenya it came to light that regulations for financial technologies are sketchy in Africa.
The widespread usage of mobile telecommunications in Africa has enabled the continent to soar above some first world countries. This was brought to light by Ashlin Perumall, a senior associate in the Corporate/M&A practice at Baker McKenzie in Johannesburg, a member of the Blockchain in Africa panel at the summit. She noted that mobile phone usage in Africa rose from 3% to about 80% in less than a decade. With the availability of local payment systems as well as e-payment systems, transfer of money from one place in the continent to another has never been this innovative. She also acknowledged the fact that the acceptance of cryptocurrency across Africa hasn’t been that forthcoming.
The President of Kenya, His Excellency President Uhuru Kenyata in his keynote speech on the first day of the festival stated that Kenya would continue to leverage new technologies to deepen the country’s financial inclusion. He also noted that there have been various successes in the utilization of technological solutions in several sectors of the economy especially increased efficiency in the delivery of public services.
Mobile financial services have increased from 26% in 2006 to a whopping 82% this year.
Sub Saharan Africa is also said to have the second largest population of unbanked adults with about 150 million people unbanked. This shows that two-thirds of Sub Saharan Africans do not possess a bank account and this creates a conducive environment for the introduction of blockchain technology in the sub-region which seeks to solve many of these financial problems.
A high percentage of migrants work between and within African countries placing the call for more remittance mechanisms more than traditional banks as remittances are a primary source of income for many African countries with about a third of the GDP gained from foreign remittances in countries like Lesotho.
With the rate of growth of the blockchain technology in Africa and the benefits it ensures on the economy, it’s essential that regulations are put in place governing financial technologies.
The two-day summit organized by the Central Bank of Kenya in conjunction with the Monetary Authority of Singapore is the first of its kind which delegations from all over Asia and Africa.