Image Credit: CNN
Image Credit: CNN
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The rise of fintech is a global phenomenon. In every major country around the world, financial technology is transforming the way we bank and do business. But it’s not just in the UK, Europe, the US and Southeast Asia where fintech is revolutionizing the way we handle money.

Fintech is also changing the way Africans manage their cash.

Africa is a Fertile Breeding Ground for New Technology

Fintech has exploded on the African continent. Africa is a fertile breeding ground for new technologies. New start-ups and fintech entrepreneurs are making the most of community leverage to ensure their financial products are relevant.

Financial technology has broken down traditional barriers for consumers living in remote areas. Africa is largely a cash economy and 90% of all retail transactions are made in cash.  This lack of development holds entrepreneurs back and makes it too expensive for start-ups to operate. Fintech is helping to facilitate economic growth in many African countries. New platforms are being developed for consumers to use, which helps to foster trust and encourage them to manage their finances online.

Fintech Helps Consumers Buy, Borrow and Save

Fintech solutions enable consumers to make transactions, save and borrow using a smartphone or any other internet-enabled device. New innovations in the fintech sector have disrupted the regular banking system, which has forced mainstream banks to become more competitive. Fintech entrepreneurs have the opportunity to create new payment infrastructures that bypass existing card payment systems. Systems like M-Pesa, which has been a real winner in Kenya, are the way forward for other African countries.

Fintech Changes Lives

Fintech has the ability to change lives in poor communities, by enabling ordinary people to transact, save and borrow online. Africa needs fintech entrepreneurs, but to be successful, fintech developers need to target their products and services to the local market. Effective marketing is essential if fintech entrepreneurs are to achieve widespread distribution, so social media and services like the Click Intelligence link building cannot be ignored.

There is clearly a huge demand for fintech products and services in Africa, but many fintech entrepreneurs are placing too much focus on the technology and not enough emphasis on marketing their products to consumers. It can take time to develop a marketable fintech product, but without adequate distribution, the product is not commercially viable.

Successful fintech services have the backing of the dominant mobile network, which gives them a wide network distribution. They also understand the market and where the current weaknesses within the local banking infrastructure lie.

Mobile fintech is the way forward for many African countries. Large swathes of Africa may not have a bank account, but the majority of people do have a mobile phone. Fintech entrepreneurs can take advantage of widespread mobile penetration, and use this to their advantage. However, what works in one country may not work so well in another, as the developers of M-Pesa found out when they tried to expand the service into South Africa – it failed dismally because of a lack of distribution.

Fintech innovation in Africa is a growth market, so to be ahead of the curve, entrepreneurs need to keep their eye on the ball.