2016 perhaps saw the biggest jump in Mobile Money use cases ever since the service started gaining popularity in the region.
Mobile Money became a backbone for other innovative financial products like insurance cover, interest-bearing savings accounts for non-banked customers, instant personal and small-business micro-loans. MTN Uganda pioneered the mobile micro loans and savings systems in MoKash, which has since seen a high growth rate.
A high percentage of Ugandans are still using cash for daily transactions which does not allow for them to be part of the formal economy. According to GSMA Intelligence reports, mobile money usage continues to be dominated by two use cases: person-to-person (P2P) transfers and airtime top-ups.
So what does 2017 hold for us in this Industry? Let’s see what industry experts have in mind:
Predictions
FinTech Startups to receive huge fundings
Almost 80% of Africa’s adult population lacks access to financial services, and companies that find a way of providing them have a huge opportunity to make significant profits. Startups that are working on finding innovative ways of providing access to things like savings and remittances, will prove very attractive to investors.
Industry expert TMS Ruge is optimistic about the FinTech industry, boldly predicting a high growth in startups building products for this: “Continuing a trend I’ve observed in 2016, I think we’ll continue to see a lot more fin-tech focused apps that are trying to make it easier for consumers to take advantage of our growing digital economies.” “More apps making easier to pay for services like electricity and water, buy tickets for entertainment, transfer money, etc.”
Stone Atwiine, CEO & Co-Founder of Remit UG hopes to see more players in the mobile lending space both USSD and apps.
Hubs and Accelerators will be focused on backing up FinTech Startups
Incubation Hubs and Accelerators will put more focus on backing up FinTech Startups as seen with Kenya’s Nest Ventures who are providing a hands-on approach in working with FinTech startups to help raise money, customer acquisition and general industry expertise.
Uganda’s Hive Colab has also tailored programs specific to FinTech startups with two already being housed at the Hub; LipaMobile and AirSave, both registering good growth.
Further reaching the Unbanked
With the rise in number of FinTech startups, will come the ultimate result of financial services reaching the unbanked and unbankable in rural Uganda.
MTN Uganda’s MoKash service played a very big role of extending financial services to the unbanked population last year. Within a period of three months, the service had signed up more than 1,000,000 customers with an average of 13,500 subscriptions per day.
Remit UG a service that provides affordable & convenient international remittances to people sending money to Africa especially to un-banked and under-banked rural dwellers, has reached great heights in achieving financial inclusion in Uganda and Africa at large.
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Interoperability in International Remittances
Stone Atwiine predicts that interoperability will continue to grow, by the end of the year. And users should be able to send money across networks in the same market and also internationally to facilitate remittances.
TMS Ruge however is cautious about the current state of structures in the FinTech industry as put up by the dominant players: “The quagmire that is our mobile money minefield isn’t making it easy without true interoperability within our networks. That won’t be fixed this year, but that means there’s a ridiculous amount of energy and innovation going into trying to make this easier.”
TMS Ruge envisions Mobile Money in a new light: “The golden dream of course is for mobile money to be declared a true digital currency where you can send it/recieve it from anyone regardless of network you are on. But I don’t see digital walled gardens going down anytime soon. 2017 is when that conversation begins in earnest though.”
Regulations will relax on FinTech Startups
Stone Atwiine firmly believes that a FinTech startup should not be regulated like a bank; “Regulators will understand innovators more and relax regulatory pressure especially on startups.”
Focus on Mobile & Online Banking
Remit UG CEO also believes that in 2017 and the near future, mobile and online banking will continue to grow, progressive banks will not increase branch network but will maintain or even reduce while pushing mobile and online heavily.
Please share your predictions with us in the comments section.
Photo Credit: Digital Trends
