Fintech. The changing African landscape

Fintech. The changing African landscape
Fintech. The changing African landscape

The tech summit acted as a catalyst, shining the spotlight on a plethora of startups, both Moroccan and African, engaged in overhauling the financial panorama and developing loan products for the benefit of unbanked populations.

HASn Morocco, the persistent use of cash remains a significant reality, reflecting traditional commercial practices and a generalized reluctance towards digital transactions. According to statistics from Bank Al-Maghrib (BAM), the circulation of cash at the end of last March reached a new record by crossing the 400 billion dirhams mark, an increase of 10.2 % compared to a year ago.

But the dynamics are such that this landscape is constantly changing. Under the impetus of government policies and private initiatives, Morocco is gradually moving towards a society less dependent on payments in hard currency. The Covid19 pandemic has given a boost to this transition, boosting the adoption of mobile payment solutions among consumers and businesses.

A plethora of startups

Lhe second edition of Gitex Africa, recently held in Marrakech, acted as a catalyst, shining the spotlight on a plethora of startups, both Moroccan and African, engaged in reshaping the financial panorama. Betting on innovation while respecting established financial mechanisms, numerous cutting-edge solutions in mobile payment, fund transfers and asset management have been unveiled, attracting strong interest from investors from the four corners of the globe.

The optimism is palpable among the experts, entrepreneurs and investors encountered on site. Yassine Regragui, a recognized figure in the Fintech sector, shares his enthusiasm: “We see dozens of young Fintech startups, which is very encouraging, especially to see that Morocco is moving towards cashless.” The tech summit served as a springboard to showcase various innovations in the Fintech sector, highlighting promising solutions for digital payment and financial inclusion across the continent.

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Among the notable entries, Lupiya Financial Services, a Zambian neobank, which won the main prize of $50,000 for its innovative financial solutions. The start-up offers loan products tailored to the needs of underserved communities in Zambia. Daba Finance, for its part, highlighted its investment platform which facilitates access to private and public capital markets in Africa. By leveraging its technology, Daba aims to democratize investing by making investment strategies accessible to all levels of investors. Note also the presence of Secondstax in this Gitex Africa 2024, which distinguished itself in the “Fintech and Blockchain Disruptor” category by standing out in its category. On the crowdfunding front, the Kiwi startup has also made an impact, standing out for its innovative platform which supports various entrepreneurial projects by facilitating access to crowdfunding. In the field of advanced technologies, Ora Technologies has captured attention with its ambition to launch a “super app”. “The trend is towards super apps in China and the United States, and it is a model that deeply inspires Africa,” explains Yassine Regragui, highlighting the growing attraction for these multifunctional platforms on the continent.

Read also | In the Gitex era, mobile payment is struggling to take off

The craze for all-in-one solutions, which integrate various digital services, reflects a profound transformation in consumption habits and expectations regarding financial services in Africa. In this dynamic of modernization and integration, Visa also played a leading role during this event, unveiling innovations in the field of digital payments. The concept of “Cashless Medina” was one of the highlights, illustrating Visa’s commitment to empower SMEs and social entrepreneurs, particularly artisans, to enter the digital economy.

Persistent challenges

NOTHowever, despite these advances, the transition to an entirely “cashless” system still faces major challenges, particularly in terms of financial inclusion and access to digital technologies, thus limiting the scope and speed of this mutation. In the development of Fintech, Morocco as well as other African nations face the “cash paradox”. Although digitalization is gaining ground and the adoption of new payment technologies is increasing, the demand for cash persists, revealing complex dynamics. This reality is rooted in ingrained payment habits, flexible monetary policies and specific challenges to financial development. In Morocco, for example, the cash mass is increasing faster than economic activity, highlighting the enduring importance of cash in the economy. This context encourages local fintech players to skillfully maneuver between tradition and financial innovation.

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