To most , depositing a check or wiring money are basic transactions . But to over 2 billion people worldwide , unceremoniously known as “ the unbanked ”, having a bank account represents quite the life hurdle . It excludes them from the financial ecosystem , making it hard for them to get a loan or even save money . Fintech has altered the landscape of the financial industry in a way that makes sure nobody gets left behind — and this applies to both individuals and countries .
The African continent and Indian Ocean region , who have long lagged behind the rest of the world in access to finance , have been the biggest winners in the Fintech story . In a continent where 60 % of adults are unbanked , Fintech has emerged as a major shaping force in Sub-Saharan Africa , resolving fundamental problems in industries beyond financial services , like healthcare , transportation and agriculture . Perhaps the old adage “ necessity is the mother of invention ” explains the explosion of innovative financial solutions originating on the continent .
Reunion Island ’ s SumUp came up with a simple , but brilliant , idea : many small businesses struggle to either procure card machines from banks , or to pay the costs associated with these card machines ( monthly contracts and the mandatory 5-6 % transaction fee on card swipes ). SumUp promises consumers an easyto-use payment system in which a card machine connects to the merchant ’ s smart device and enables him / her to accept card payments for less than half the transaction fee imposed by banks . Its resounding success has catalyzed entrepreneurship across the island and stimulated the growth of a wave of small and medium enterprises , who now have lower barriers to entry . Similarly , Orange Money is leveraging its decadelong experience in mobile money solutions to serve the Malagasy population . Beyond allowing 40 millions of Africans to perform instant financial transactions through their phone , Orange Money and PAMF Madagascar have introduced micro-lending services in Madagascar : through M-Kajy , customers can open a digital savings account and apply for a loan in mere seconds , offering them a valuable lifeline to emerge from poverty and build financial resilience .
© Nathan Dumlao
Policymakers have been quick to play their part in its development , creating enabling frameworks to regulate Fintech activities , all while making them thrive . In Mauritius , incubator and accelerator schemes , a regulatory sandbox and an 8-year income tax exemption for businesses that develop intellectual property assets have helped to fuel the growth of Fintech across the island . In similar fashion , The Government of Seychelles is quickly filling the existing infrastructure gap to lay the foundation for a bright future . Bilateral agreements are being forged between the Indian Ocean Islands to remove trade barriers , increase the sharing of technology and improve the business environment — all with the goal of executing common projects .
One thing is certain . Indian Ocean islands , their strategic location and enabling ecosystem are giving rise to serial innovators and entrepreneurs , all of whom are proving that the future of finance is already a reality in emerging countries today .
© Joshua Earle
54