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FinTech Regulatory Sandbox in Zambia

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About a decade ago, young talent flocked to Europe and North America, searching for opportunities and high paid jobs.

Now realising that Africa is where the opportunities are, North to South migration is increasing and as many countries across the world, start-ups are seen as the place to be for the new generation.

Movemeback, a members-only community that makes it easy for people to find exciting opportunities in Africa, is a great example of this new trend.

The power of ‘Regulatory Sandbox’

While skilled labour is coming back home, the building blocks required to make these industries function have a lot to be commended.

Payment system by Zoona in Lusaka, Zambia

In the finance industry, Zambia’s Central Bank is perhaps the continent’s standout regulator. It simplified how Zoona, a Zambia based Fintech start-up that provides money transfer and other services to unbanked consumers, could go beyond compliance and regulatory hurdles. Interestingly, Zambia is perhaps the only country in Africa where a payment company has more market share in the money transfer business than any of the mobile network operators.

Zambia’s Central Bank also demonstrated its forward thinking by enclosing Zazu, a Fintech that is building the first digital-only bank, in what you might refer to as a ‘regulatory sandbox environment’.

While digital-only and branchless banking is getting crowded in Europe and North America, there is not yet a recorded stand alone digital bank in Africa.While CBA has launched Loop, it is not a digital-only bank, just a rebranded service. And neither is Alat in Nigeria. Zambia’s regulator is showing a very progressive mentality by working with Zazu, and perfectly illustrates the kind of possibility that has not yet been seen in other parts of the continent.

The Zambian government is seeking innovative solutions to solve current issues too. A new data center built in partnership with Huawei was recently unveiled and will welcome the new state of the digital art identity slated for launch by 2020.


 

Why the World is looking at Africa

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In every African ‘Tech’ story, the ubiquity of mobile phones is what makes the opportunities so big in the continent.

The global tech elite noticed Africa’s upward trajectory and have already started to place their bets. Mr. Zuckerberg rolled out Facebook Lite which is already very popular. Sundar Pichai visited Nigeria and Alibaba’s Jack Ma has launched a $10 Million investment vehicle for African entrepreneurs.

The rising Fintech stars

Kenya’s M-Pesa remains a global poster child for financial disruption since it negated the need for people to have physical branches in order to use financial services. Flutterwave, E’s new payment company, counts Uber amongst its clients and barely 12 months in existence, has processed over 14 million transactions worth $1.5 billion.

The youngest continent on earth

Yoco POS terminals

Africa is home to the youngest population on earth and by 2050, is poised to have the largest population accounting for one fourth of the world population.

This young generation is set to increase the working age population and is a major opportunity for economic growth on the continent. Smartphone adoption rate is rising year after year and demand for digital services is skyrocketing as these young people leapfrog whole technologies. Far from fetishizing entreprenualism, these young people are harnessing the power of technology to usher in a new era, on their terms.

Yoco, a South Africa based Fintech, simplifies how Ma and Pa shops can own POS terminals. A few years ago, a bank needed to check first who you were and what you were selling. Now, in a few clicks, Yoco can deliver a POS terminal to anyone from delivery drivers to street vendors or coffee shops.


 

African Fintech Mapping Week #1: Aella Credit, Shika, CowryWise and Root

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Every week, Techfoliance highlights four promising Fintech start-ups across Africa in various verticals: lending, payment, investment, etc. In this weekly FinTech mapping we have Aella Credit, Shika, CowryWise and Root.

[divider]Fintech Mapping[/divider]

Aella Credit

Aella Credit is a US-based Fintech that is building Platforms that make it easier for individuals in Africa to gain access to financing. The start-up targets the 425 million employed Africans who have no access to credit.

Discover here: https://www.aellacredit.com/

Shika

Shika is a Kenyan-based Fintech powered by Alternative circle that gives people access to instant micro-loans directly from their mobile. The company recently raised $1.1 million from Creditinfo Group. The app is still in beta test.

Discover here: https://shika-app.com/

CowryWise

CowryWise is a Nigeria-based Fintech that has developed a mobile platform to help customers automate saving money. The company is reimagining and reworking how financial services get delivered to everyone. It is democratising wealth management services and making them available cheaply to the masses with technology.

Discover here: https://cowrywise.com/

Root

Root is a South African-based Fintech that has developed a programmable bank account for software developers. With its API, developers can build their own interface and control their money programmatically. The start-up is powered by Standard Bank of South Africa and is still in beta test.

Discover here: https://root.co.za/


 

Building the ‘PayPal Mafia’ in Africa

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In June 2016, Andela, the marketplace that connects companies with the best African software developers, made global headlines with its US$24 Million Series B funding round.

This investment, which was the first led by the Chan Zuckerberg Initiative, illustrates the increasing interest from foreign investors toward African start-ups. Among other investors were Omidyar Network from GV (formerly Google Ventures) and Africa’s very own CRE Ventures.

Sky is the Limit

Like many other success stories, what impressed investors was the passion and boldness of the team coupled with its ability to pivot when cash started to ran out. Imagine a continent where a whole generation of young people want to shape the future of their country, with tech being the only possible way to go faster than any time before.

Iyinoluwa Aboyeji, founder & CEO Flutterwave

Iyinoluwa Aboyeji, also known as “E”, has become the new face of the rising African tech ecosystem. With countless of references being shared on his Twitter page, his ambition is clear: building or recreate the ‘PayPal Mafia’ in Africa.

When “E” announced few weeks later that he was leaving Andela to focus on building a payment company, some were surprised by this announcement but many felt inspired by his will to compete with Silicon Valley.

Challenges to overcome

At this stage, it would be a mistake not to mention that starting a company in Africa is hard. Bloomberg recently featured the story of Aligo Dangote, the richest man in Africa, which perfectly describes the upcoming challenges for African founders.

Mr. Dangote wanted to build an oil refinery in Nigeria. The problem was that the ports weren’t large enough, so he decided to build his own jetty directly in the ocean. There were no cranes for the construction, so he decided to buy 300 of them. There were no qualified workers, so he decided to hire over 30 000 foreign people. These people needed a place to stay, so he built houses for them.

It is true that being Africa’s richest man also made it possible, but imagine the barriers when you start with nothing.


 

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