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How FinTech Companies Changed Africa

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FinTech Companies Changed Africa

Although Africa’s economies may be lagging behind its more developed counterparts, it seems that the continent is not immune to the global fintech revolution. Africa started witnessing a substantial surge in fintech startups in 2015. The total funding from venture capitalists spiked by 51 percent to $195 million between 2016 and 2017, with fintech funding accounting for a third of the amount. That’s a significant amount given that total global funding for seed-stage companies, early-stage venture capitalist rounds, and VC rounds was $851 million, $7.137 billion, and $6.9 billion respectively. 

Currently, there are well over 300 startups in operation all over the continent — 94 operate in South Africa, 74 in Nigeria, and 56 in Kenya. It’s not a surprise that these three countries are spearheading the fintech revolution in Africa as they are considered the top three investment destinations in Africa.

Regional comparisons in fintech adoption show that South Africa is in the lead with around 35 percent of fintech startups concentrated in the region. West Africa follows close behind with around 34 percent.

Africa’sfintech industry to a large extent owes its existence to the development of M-Pesa, a Kenyan-based mobile money transfer service that has given Kenyans the ability to access financial services away from banks. Currently, the platform supports over 25 million customers in over ten markets in Europe, Africa, and Asia. The number of M-Pesa users has grown by 32 percent from 17.12 million to 22.62 million as of June 2017. The massive success enjoyed by M-Pesa has influenced other FinTech companies to join the finance sector to develop financial solutions such as those offered by M-Pesa.

Fintech Implementation in Africa

Fintech companies in Africa are mostly focusing on two broad categories:

  • payments and transfers;
  • lending and finance.

Of the two categories, payments and transfers have recorded an influx of startup companies compared to the others. Reports show that a majority of these startups focus mainly on simplifying the process of sending and receiving money.

Some fintech companies in Africa that are taking major steps in revolutionising the finance sector in Africa include (aside from M-Pesa):

  • Flutterwave has operations in over 36 countries and is partnered with 10 African banks. It provides payment technologies and infrastructure to Africa’s largest financial institutions. Today, Flutterwave has processed over $1.2 billion in payments. The primary goal of Flutterwave is to provide solutions for enterprises, entrepreneurs, and banks alike. It presents its customers with no special, annual, or upfront project fees. Instead, Flutterwave bridges the digital payments gap that exists between users and banks. Their Nigerian customers can execute money transfers directly into several bank accounts without any hassle.
  • Pezesha, initially launched in Kenya, is a peer-to-business micro-lending marketplace made up of low-income borrowers. In Africa, formal credit services are hard to attain, and on top of that, they have incredibly high interest rates. Therefore, most Africans are unable to secure reliable credit facilities that they can safely payback. Users of Pezesha can acquire instant loans on their mobile phones via SMS provided that minimum criteria are met. Apart from low-income earners, Pezesha also extends its services to SMEs that make up 80 percent of Africa’s employment. It not only drives up the economies of the continent but ensures the continued existence of small businesses across the continent.
  • Cellulant, a digital commerce and payments service provider, is well established and operational in 11 countries. The company works with over 90 banks. The Cellulant ecosystem has support for over 100 million customers. As of January last year, the company served roughly 12 percent of Africa’s mobile consumers who utilise the platform to make payments. This year, Cellulant raised $47.5 million from a collection of investors that included Satya Capital, TPG Growth, Endeavour Catalyst, and the Rise Fund.
  • Tala, a mobile technology company that’s providing access to credit by putting mobile credit services into the hands of consumers, is operational in several countries in Africa and outside Africa. The company leverages an android app that collects data from each consumer, determines their credit score, and disburses a loan in <10 minutes. So far, the company has disbursed over a million dollars to individuals in East Africa and outside Africa.
  • Numida, a digital financial services company situated in Uganda, won the Kampala Seedstar World Competition in 2017. The company boasts of a 99 percent repayment rate and has since disbursed about 190 loans to 135 Ugandan SMEs. Other than providing small unsecured loans to small businesses, the firm helps these businesses digitise their financial records through the Numida app. Through the Numida app, Numida can assess a client’s creditworthiness and then issues an appropriately sized unsecured loan.

Potential of using Fintech in Africa 

FinTechAfrica is an immense continent with different economies supporting a total population of about 1 billion individuals residing in 54 sovereign countries. Surprisingly, only about 17 percent of the entire African population is banked. With nearly 80 percent of the total population still unbanked (and up to 95 million unbanked adults in Sub-Saharan Africa alone), Africa offers a unique breeding ground for the development of the fintech industry. A significant underbanked population ensures that fintech will most likely be an enabler of financial inclusion.    

Innovation takes time and is often a collection of economies and nations that have the financial capability to invest, research, and develop on a broader scale. African nations, not having the same capabilities as developed nations, are provided with a unique opportunity that they can leverage. They can ‘jump’ inferior and redundant stages of technology advancement and go straight to adopting innovations. For example, currently, millions of Africans are in possession of mobile phone devices without ever going through the hassle of owning a landline at all. A phase that already-developed nations could not have skipped.

Technology is a crucial driver of businesses and entrepreneurship today. Due to this, financial procedures have been developing extremely fast, and there is an immense transformation in many aspects of financial processes. The Internet penetration rate in Africa recently stood at around 35.2 percent while the mobile penetration rate in the continent stands at 44 percent. Out of these two, Kenya emerges as the strongest African country, as it has an internet penetration rate of 85 percent and a mobile penetration rate of 95.1 percent.

According to GSMA, mobile money accounts in Africa have surpassed traditional bank accounts. Mobile money accounts have been on the rise, with statistics showing a steady growth in numbers from 0.2 million to 277 million between 2007 and 2016. The number of active bank accounts in Africa was 178 million as of December 2015. This huge difference in numbers indicates the potential that Africa offers to fintech startups focused on providing payment solutions. Technology innovation coupled with increasing Internet and mobile penetration rates have made the growth of African fintech companies a possibility. Subsequently, this has substantially increased investor interest in the sector even further.    

Africa Welcoming Innovation

The fintech revolution in Africa is not a PR stunt. Fintech companies are attracting a previously unbanked population while at the same time retaining already existing traditional bank customers. Digitisation is helping financial institutions deliver digital financial products and services to a greater number of customers across the continent.

Increased dependence on these innovative fintech companies is projected to reduce demand for bank services. Subsequently, this could lead to bank branches shut down, with only a few remaining as destinations for problem resolution, advice, etc. For example, Kenya’s M-Pesa mobile payment services have made it possible for P2P mobile payments to be made both locally and internationally.

These startups are redefining the industry’s perception of what it means to be called a bank. Not only do they offer bank-like services, but they also avail loans, process financial transactions, and innovate much faster than banks.

Africa is hopping onto the fintech bandwagon, learning from the experiences of developed economies such as Asia, America, and Europe, and even leapfrogging past unnecessary steps, straight to modern innovation. 

This guest post was contributed by Paweł Tomczyk, founder of the blockchain-focused content marketing agency Cyberius

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Weekly Roundup: African-Inspired NFT Art Collection to Launch in October & More

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African Inspired NFT Art Collection

An African-inspired NFT art collection is set to launch in October. To learn about this and other top stories this week, read on.

African-Inspired NFT Art Collection to Launch in October

Masks of EtherMasks of Ether, an NFT collection that draws inspiration from West African tribal art, will launch on October 5. Harrison Foko, the artist and creator of the NFT collection, “will release 10,000 generative images featuring pixel art masks.” Foko’s goal is to bring traditional African art to the blockchain and expose it to new audiences.

“I am excited to bring my own roots into the NFT space. Using something so tribal and traditional in this modern pixel-art form has never been done before. The community is ready and excited for something new,” he said.

Foko plans to give $100,000 of the NFT proceeds to The CryptoSavannah Foundation and Survival International. The former is a non for profit organisation using the blockchain to change African lives, while the latter is a human rights organisation that fights for the rights of indigenous people.

More and more African artists are embracing non-fungible tokens. For instance, these three Zimbabwean artists have made some income from selling their art on NFT marketplaces.

Crypto Exchange Yellow Card Secures $15M in Funding

Yellow Card, a crypto exchange operating in twelve countries, has secured $15 million in funding. According to the company, they will use the funds to scale their operations. Since the beginning of the pandemic, the company has increased its users across Africa almost 30-fold.

Yellow Card

“Our mission has always been to make cryptocurrency accessible anywhere and everywhere across the African continent. Now, we have the backing to make that a reality, alongside an amazing team of investors who share our vision,” said Chris Maurice, the CEO.

The Series A funding round was led by Valar Ventures, Castle Island Ventures, and Third Prime with participation from Square Inc., Coinbase Ventures, Polychain Capital, GreenHouse Capital, BlockFi, Blockchain.com, MoonPay, and more.

“We believe in Yellow Card’s vision of a Pan-African cryptocurrency platform. What cemented the deal is their multi-national team, which we believe has the local knowledge, technical expertise, and unequivocal passion to address the basic financial services needs of the continent,” stated James Fitzgerald from Valar Ventures.

eNaira Website Goes Live

Nigeria’s eNaira website is live ahead of the launch today. This could indicate that the Central Bank of Nigeria (CBN) is keen on seeing its plans for a Central Bank Digital Currency (CBDC) succeed.

The website states: “[The] eNaira serves as both a medium of exchange and a store of value, offering better payment prospects in retail transactions when compared to cash payments.”

With a CBDC in place, experts are worried that Nigeria will follow China’s steps and implement more anti-crypto policies.

“Yes, we expect the CBN to champion even more anti-crypto policies, as it is clear it sees crypto as a hindrance to its monetary policy objectives even though data confirms that as a fallacy. Every crypto company in Nigeria should innovate ways to work within a restrictive system and think about jurisdictional changes,” Chiagozie Iwu, CEO of crypto exchange Naijacrypto said.

Paxful Promotes Crypto Developers in Nigeria with Donation

Paxful has announced that it is donating to the Human Rights Foundation. The funds will go to “the Qala Fellowship, a program that will find and grow local Nigerian talent, starting with the developers who want to build a career in crypto.” The program will help the crypto developers to contribute to the open-source network, secure jobs with bitcoin companies, or start their own companies.

Paxful

Paxful CEO Ray Youssef said: “Paxful follows energy, and it is clear that the Nigerian youth will make a profound impact on the global economy through Bitcoin. They have entrepreneurship baked into their DNA, but they [do not have] the chance to showcase their talent on the global stage. First and foremost, the Qala Fellowship is a career roadmap for Nigerian developers. But it also is a way to support the local economy and a means for Bitcoin to capture more developer mindshare. We are proud to fund this project and cannot wait to see what these developers create.”

Nigerians that join this program will benefit from a six-month course that will teach them everything they need to be successful crypto developers. Moreover, Qala Fellowship will facilitate internships and full-time jobs and set up talks with seasoned professionals.

To learn more about Bitcoin, download the Bitcoin Beginner’s Handbook for free.

Bitcoin Beginner's Handbook

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The 2021 Lagos Blockchain & Crypto Conference Will Take Place on September 11-12

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Lagos Blockchain & Crypto Conference

We are delighted to announce that Nigeria’s premium hybrid blockchain conference, the Lagos Blockchain & Crypto Conference, organized and curated by Blockchain Nigeria User Group is back and bigger!

Covid-19 pandemic did not permit us to hold the event in 2020, but thankfully things are looking better now as we are poised to adhere strictly to the guidelines required for in-person events.

This year’s conference-themed “Blockchain, Crypto-Arts and the Future of Money” will be held at the Civic Center event facility along Ozumba Mbadiwe Street, Victoria Island Lagos, from 11th to 12th September 2021.

The conference will be chaired by Dr. Chuka Agbu, SAN, Lead Counsel at Lexavier Partners, and Chairman Blockchain & Virtual Financial Assets Regulations Working Group set up by SEC Nigeria.

Mr. Kashifu Inuwa Abdullahi — Director-General/CEO National Agency for Technology Development (NITDA) will be the Special Guest of Honor while Prof Olayinka David-West, Academic Director and Professor of Information Systems at the Lagos Business School will be the Lead Keynote Speaker.

Ian Putter, Managing Director at Blockchain Research Institute (BRI) and Digital Innovation/ DLT & Blockchain Executive at Standard Bank Group SA, as well as Dr. Abubakar Suleiman, Managing Director at Sterling Bank PLC, is expected to grace the conference as the Keynote Speakers.

Other high profile industry experts, senior-level executives and thought leaders already confirmed as speakers include Dr. Sarah Alade, SA to President on Finance and economy, Yusuf Rakiya Opemi, Assistant Director PSMD, Central Bank of Nigeria, Agama Emomotimi, Deputy Director exchange licensing/ registration SEC Nigeria, Ernest Mbenkum, Founder/CEO Bantu Foundation. Erikan Obotetukudo, Founder Audacity Fund, Adedeji Owonibi, COO Convexity Technologies, Shaun E. Johnson, co-director Tachyon, Babatunde Obrimah, COO Fintech Association of Nigeria Nigeria

Date: 11–12th September 2021 | Venue: Civic Center VI, Lagos | Time: 10.00 AM

At the upcoming #LagosBlockchain2021, attendees will discover how Blockchain, DeFi, and NFTs together with, IoT, AI and Virtual Financial Assets are altering and disrupting incumbents and creating new opportunities for forward-thinking individuals, nations, and organizations. We shall also be drawing attention to the concept of creator economy, digital ownership & Intergenerational wealth creation using DeFi and NFTs.

One of Africa’s largest and most untapped markets is the creator economy. Using NFTs and Crypto Arts, creators across art, film, gaming, sports, etc can monetize their followers and intellectual property (i.e. ideas, copyright). They can have royalties and revenue streams across multiple assets. They can leverage their work to earn interest or borrow capital to create even more value.

The conference has several tracks consisting of Panel discussions, Innovative tech product exhibitions, NFT workshops, and Startup Investor Round-Table.

The event will be both virtual and physical and is being organized in partnership with the Fintech Association of Nigeria and will be both virtual and physical.

Our previous conferences have attracted key figures like Prof Kingsley Muoghalu, Dr. Mrs. Oby Ozekwesili, Dr. Andrew Nevin, Dr. Segun Aina and several eminent personalities favorably disposed to the positive impact of Blockchain Technology in our polity.

This year’s conference sponsors include Tezos Foundation, Convexity, Quidax, Bantu Blockchain, Audacity, Muna.Africa and Xend.Finance.

More information about the event is available at the event website: https://blockchainnigeria.group/

About BNUG

Blockchain Nigeria User GroupBlockchain Nigeria User Group (BNUG) is a vibrant group of Blockchain and Cryptocurrency developers, enthusiasts, and investors helping to drive adoption and awareness of the Blockchain industry in Nigeria and across Africa since 2016. The objective of BNUG is primarily to create a pro-innovation environment for the industry, meeting the growing global demand for accessible, transparent and democratic financial and collaborative systems. Blockchain Nigeria User Group, now transitioning into a DAO, is a sub-set of Organization of Blockchain Technology Users (OBTU), http://blockchainusers.org, a duly incorporated Trust with CAC, and an association desiring Self-Regulatory Organisation (SRO) status for the Blockchain Technology Industry in Nigeria and across Africa.

BNUG is a strong advocate for Blockchain Technology and works with all levels of government policymakers and regulators such as SEC Nigeria, NITDA, NDIC, CBN, and other stakeholders to support businesses, develop talents and drive career opportunities in Blockchain Technology. Thus promoting a sustainable community that enhances consumer safety and industry competitiveness.

Disclaimer: This is a press release. Readers should do their own due diligence before taking any actions related to any company, product, or service mentioned in this article. BitcoinAfrica.io is not responsible, directly or indirectly, for any loss or damage caused by or in connection with the use of or reliance on any content, product, or service mentioned in this post. 

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The First African Art Collection Powered by NFTs is Here

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African Art
Photo credits: Kureng Dapel/Rich Allela

Picha Images – a digital media company powered by Artificial intelligence and Big Data – is launching the first crypto art non-fungible tokens (NFTs) in Africa. The upcoming auction will feature African art from the Kenyan-based Multiple Award-Winning Photographer and Filmmaker Rich Allela and will be held from April 26 to May 3, 2021.

The NFT auction and artwork will be hosted on OpenSea, one of the biggest non-fungible token digital marketplaces, founded in 2018.

Why is Picha Images Going Crypto?

Picha Images has a track record of being highly innovative and has been recognised as a disruptor in the Kenyan and African creative industries.

Covid Art Gallery

The Virtual Africa COVID exhibition held by Picha Images in conjunction with the World Health Organisation (WHO) and Create2030

The company embraces Artificial intelligence and utilises Big Data analytics to produce high-quality photo and video productions.

Furthermore, Picha Images develops products and services in Business to Business (B2B) photography; digitises hardcopy images; facilitates cloud storage of images for companies, and carries out videography. The company has in the past been credited with holding one-of-a-kind Augmented and Virtual Reality exhibitions, even during tough times. 

Pre-COVID exhibition

Bringing still images to life using Artificial Intelligence in Rich Allela’s exhibition “30 under 30”, held in 2019 (Pre-COVID)

As a company that values technological advancements, Picha Images’ approach of having NFTs for artists such as Rich Allela makes technological and financial sense. The company is currently placing the wellbeing of their creative artists first by exposing them to a way to secure their work, maintain the copyrights to their creations and earn royalties in perpetuity.

For a customer of Picha Images, purchasing these NFTs will mean that you will have hacker-resistant proof of ownership of a digital piece of art.

Why Rich Allela?

Afro-renaissance

Photo credits: Rich Allela

Rich Allela is a multidisciplinary artist whose work focuses on culture and heritage in Africa. He has an interest in documenting cultures that are at the threat of disappearing due to modernisation.

Allela’s works are famously described as “Afro-renaissance” because they herald the rebirth of the African culture through the creation of a new generation of art aimed at rewriting the African narrative.

These unique art pieces have won numerous awards including the Africa PicFair photo awards and Kenya Photo Awards and have been used by companies such as Canon Global to launch products such as new cameras. As an influential artist, Rich Allela’s story has been featured on CNN, BBC, and other news outlets around the world.

Speaking to BitcoinAfrica.io, Rich Allela said;

“For ages, artists have been getting a raw deal when it comes to secondary sales of their work. By launching the Rich Allela’s Afro-renaissance collection on NFT, Picha Images aims to empower artists to maintain the copyright of their work and earn from secondary sales. Through this auction, the public will place their bids where the highest bidder will walk away with a piece of digital art and send a message to the world on the value of art as an investment worth making.”

Would You Like to Participate in the NFT Auction?

The auction will go live on April 26 and can be accessed via https://opensea.io/accounts/Rich_Allela.

To learn more about Rich Allela’s works, visit his Instagram account @Richallela or reach out to Picha Images by visiting their website.

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