As markets around the world expand, and walls between those markets fall, financial services take on forms that were totally unimaginable fifty years ago. Technology, though a large umbrella term, plays the role of magician and makes possibilities real in the matter of hours, days and weeks. So it might not really be a surprise that “fintech” is buzzing louder than ever, with inventions and innovations creating impact beyond borders.
While the US, Europe and Asia Pacific see a rush in their fintech investment numbers, every year clocking a new high, Africa slowly and surely joins the movement. And if sources are to be believed, Kenya is among the fastest growing nations in that sphere, with businesses around mobile money leading the way. The agenda seems to be becoming clearer as days pass. A huge population in Kenya (and across Africa) continues to be unbanked, and the aim of many of these fintech enterprises is to make their services available to such people.
Let’s rewind a bit to how things were even a few years back. Remittances and digital payments both fell under the purview of licensed banks. Added to that, alternative lenders faced a dual challenge : their customer base was not large enough and obtaining extra credit always entailed additional costs. Fintech in Kenya has been able to address multiple challenges like these and a number of companies have been instrumental in bringing about these changes. The following points cover them and their workings.
A number of characteristics come together to make a fintech company futuristic and relevant. To be able to bring together service platforms and businesses for a seamless experience, to ensure security is taken care of in this era of relaxing regulations and to make space for innovation so that user experience changes for the better. All of these seem to have been mastered by Finserve Africa, one of the fintech companies in Kenya that is the mastermind behind a number of brilliantly innovated offerings.
Though the company began its operations in 2014, it was in 2018 that it became an independent commercial entity with its own operations and board (separate from Equity Group, which Finserve owns). In time, the company has gone on to own almost 60% of the fintech market shares, and is regarded highly for the leaps it has made towards bringing together remittance partners such as Equity Direct, PayPal, Wave, Money Gram and Western Union, among others.
Would you believe it if you heard that the first roots of JamboPay took place in a cyber cafe, because founder Danson Musemi (who runs WebTribe, the company that JamboPay is registered under) didn’t have another space to work out from? Well, that’s how this payment gateway was birthed way back in 2009, a time when fintech was still fledgling.
JamboPay is now the reason that residents living in East Africa can send and receive money from anywhere in the world. The defining feature about JamboPay is that it works as an aggregator and brings together platforms such as Airtel Money, M-Pesa and T-Cash while also allowing payments to be done through bank transfers as well over MasterCard and Visa debit and credit cards. A steady track record ensured JamboPay bagged a Nairobi County Government contract in 2014 to collect land rates, parking fees and business permits.
In the ever-widening world of fintech where mobile money and banking services are being accessed by more people, there’s a special need for credit rating check-ins. Where there had been a gap earlier, today stands Branch, a mobile lending app, which operates across Kenya, Nigeria, Tanzania as well as Mexico and India. What makes Branch relevant in our times is that it makes use of the technology that’s common yet growing – smartphones and GPS to tap into messages, GPS data, call logs as well as text messages around bank balance and payments, to assess a person’s credit worthiness.
What’s really intriguing is that despite its nature, the app has not raised too many eyebrows since its inception in 2015. In fact, Matt Flannery, the CEO of Branch, has been reported as saying that in sub-Saharan Africa, more than a million phones have gone on to download the app, since it came to be. Recently Branch declared that it is going on a partnership with Visa, to be able to offer special terms on loans for merchants in Africa that accept Visa on their mobile phones. This step will also allow Branch customers, who have been approved for loans, to withdraw funds from local ATMs even if they didn’t have bank accounts.
Raising money is as important as it is difficult. As individuals, non-profit organisations and causes gain both ground and speed across the world, fundraising takes on a life of its own. M-Changa happens to be Africa’s very own largest as well as first mobile fundraising site. It lets users register for free, verify their details, activate their fundraiser and then start collecting payments as they come in, either through mobile money or credit card payments.
M-Changa merits this special mention in this list because of the care and consideration they’ve taken to come up with what they cover under fundraising : from weddings to funerals and from businesses to disasters. The mobile platform also acts as a means of engaging the world with content that a user wants to put out there – embedded videos, images and stories to bring to light a cause or situation.
Fintech is clearly on a rise in Africa and this trend is supported by fintech companies in Kenya that aren’t just tuning into the current rhythms of the market but also figuring out the music will evolve as the years pass.