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EXPLORING<br />
AFRICAN<br />
FINTECH<br />
OKA-HR<br />
www.okahr.co<br />
1
FORWARD<br />
Africa is the second largest continent in the world<br />
with approximately 1.2-billion citizens divided<br />
between 54 countries. As expected for such a large<br />
continent it is a vast area and presents a variety<br />
of cultures, nationalities, and levels of economic<br />
developments. We must therefore be careful not to<br />
make too broad a general about the situation of the<br />
market. This report focuses on FinTech – financial<br />
technology – development on the continent, giving<br />
insight into what is happening on the continent in<br />
the sector.<br />
There has been a lot of attention on FinTech in Africa,<br />
particularly for its mobile financial services and the<br />
huge success of reaching the unbanked. However,<br />
we felt that so far no publication has put together<br />
elements relating to legislation, possible effects<br />
of FinTech, and those up and coming innovative<br />
businesses within Africa’s FinTech space. Here we<br />
offer some way by which to rectify that position,<br />
collating all these elements in one document. The<br />
sector is very dynamic and this document does not<br />
claim to cover everything happening in the field.<br />
However, we are certain that you will learn<br />
something from the extensive research which is<br />
presented. For those of you new to FinTech in Africa<br />
this will provide an excellent introduction which<br />
gives information on some of the ‘basics’. Whilst<br />
for those more experienced in Africa’s FinTech<br />
efforts can have a document to refer to which puts<br />
together what you might already know with some<br />
added depth, particular on the legislative side which<br />
has, to our knowledge, not been as extensively<br />
collated as we have presented here.<br />
This report is intended for anybody invested in<br />
FinTech and its development. Whether journalists,<br />
government officials – in and outside Africa, nongovernment<br />
organisations, or charities. We hope<br />
that you gain something from this report and that it<br />
contributes positively to your knowledge.<br />
Yinka Opaneye<br />
CEO OKA-HR<br />
www.okahr.co<br />
2
Contents<br />
EXECUTIVE SUMMARY................................................................................................................... 4<br />
DEFINITIONS..................................................................................................................................6<br />
PART 1: COUNTRY HIGHLIGHTS.......................................................................................................9<br />
ESTABLISHED PLAYERS (SANGK).................................................................................................9<br />
South Africa......................................................................................................................10<br />
Nigeria..............................................................................................................................12<br />
Ghana............................................................................................................................... 14<br />
Kenya................................................................................................................................16<br />
RISING STARS............................................................................................................................18<br />
Ethiopia (Addis Ababa).....................................................................................................18<br />
Egypt (Cairo)....................................................................................................................19<br />
Angola (Luanda)..............................................................................................................19<br />
PART 2: ACROSS THE CONTINENT............................................................................................... 23<br />
FINTECH (MOBILE FINANCIAL SERVICES) REGULATIONS........................................................ 23<br />
Northern Africa...............................................................................................................24<br />
Eastern Africa.................................................................................................................25<br />
Southern Africa...............................................................................................................28<br />
Western Africa................................................................................................................29<br />
MOBILE FINANCIAL SERVICES COLLABORATIONS.................................................................. 32<br />
Southern and Eastern Africa......................................................................................... 32<br />
Northern and Western Africa........................................................................................ 33<br />
PART 3: DERIVATIVES AND DRIVERS............................................................................................... 36<br />
SECONDARY EFFECTS OF FINTECH....................................................................................... 36<br />
HIGHLIGHTED START-UP ENABLERS.........................................................................................43<br />
Incubators.......................................................................................................................43<br />
Accelerators................................................................................................................... 44<br />
Co-working spaces........................................................................................................ 44<br />
Innovation Centres.........................................................................................................45<br />
TABLES AND DIAGRAMS:<br />
• MFS Potential – Formally banked and mobile penetration rates..........................21-22<br />
• Enabling Environment – Mapping the legislative landscape......................................31<br />
• Percentage and geographical spread of MFS deals over time............................... 35<br />
• Financial Deepening through M-Pesa.....................................................................40-43<br />
3
EXECUTIVE SUMMARY<br />
Within this group of countries there exists a<br />
considerable range in terms of financial inclusion.<br />
From the more financially included countries such as<br />
Mauritius and South Africa with 82 and 75 percent of<br />
their respective populations holding bank accounts;<br />
to less financially inclusive economies like Niger and<br />
Guinea where only 7 percent hold bank accounts.<br />
Across the entire continent, the median percentage<br />
of bank account holders stands at 23 percent. The<br />
median number of bank branches to every 100,000<br />
people across the continent is also low at 4.75.<br />
However, this population does have a significantly<br />
higher percentage of people with access to mobile<br />
phones. Though subscription penetration rates<br />
again vary from 7 to 813 percent (Eritrea and<br />
Comoros respectively), the median penetration<br />
rate is 81 percent. It means individuals are more<br />
than three times as likely to possess mobile phones<br />
as they are to hold a bank account. It is this simple<br />
concept which presents an opportunity for financial<br />
inclusion through FinTech – Mobile Financial Services<br />
(MFS) specifically.<br />
Part 1 – Country Highlights: Established Players<br />
and Rising Stars<br />
We selected four countries with the most influence,<br />
potential, and economic stability from across<br />
Africa: South Africa, Nigeria, Ghana, and Kenya<br />
(SANGK). Each is given an in-depth analysis of<br />
their Information, Communication and Technology<br />
(ICT) and Finance sectors. All four countries have<br />
well-developed start-up ecosystems to nurture<br />
the next generation of FinTech firms. The reasons<br />
each gives for further ICT investment differs<br />
slightly. Nigeria has focussed more on its ICT<br />
and telecommunications industry in an attempt<br />
to diversify its economy away from oil revenue.<br />
Ghana has introduced strategic visions to greater<br />
incorporate ICT into education, and Kenya hopes<br />
to leverage the ICT sector to develop itself into a<br />
“middle income” country.<br />
The common element in all four established<br />
players is their acute skills shortage particularly<br />
in the field of ICT. Though all four governments<br />
understand this fact and have put strategies in<br />
place to remedy the shortage, most have attained<br />
moderate to poor success in tackling this issue. For<br />
most companies, particularly multinational firms,<br />
it has resulted in very well-developed internal<br />
learning programmes. It has also forced startups<br />
to compete more vigorously for ICT skilled<br />
employees.<br />
Our three rising stars were chosen for various<br />
reasons:<br />
a) Ethiopia (Addis Ababa): Following years of stability,<br />
the country has been achieving steady rates of<br />
growth. It also has a large population of over<br />
90-million and growing; many of whom remain<br />
unbanked and potential MFS users.<br />
b) Egypt (Cairo): The city is a developed and<br />
well-respected ecosystem particularly for<br />
crowdfunding. However, there is a lot of potential<br />
for MFS as there still remains a large unbanked<br />
population. Moreover, its geographical position<br />
gives it access to the Middle East, North Africa,<br />
and Europe.<br />
c) Angola (Luanda): The country has the capabilities<br />
of becoming a telecommunications hub on the<br />
continent and is set to have over a fifth of its<br />
population using 4G by 2020. Additionally its<br />
financial sector, like the rest of the economy, is<br />
growing rapidly.<br />
Part 2 – Across the Continent: Legislative<br />
Frameworks and Collaborations<br />
There are three structures (business models)<br />
which have been used to deploy MFS: bankbased,<br />
non-bank based, and (independent)<br />
payment provider based. Most countries have<br />
permitted one or two business models; Nigeria<br />
is the only country studied which permits three<br />
models for MFS deployment. The regulation of<br />
these MFSs has been split between Central Banks<br />
and Telecommunication ministry departments.<br />
Some countries such as Tanzania have<br />
created specific committees to coordinate the<br />
communication between the two regulators. The<br />
4
level of success in coordination (with or without<br />
a designated committee) varies considerably.<br />
Some countries (e.g. Tanzania) are rumoured<br />
to have exceptional inter-regulatory relations,<br />
whilst others (e.g. Zimbabwe) are rumoured to<br />
have more strained relationships.<br />
Rather than amend Central Banking law, all<br />
countries analysed have put in place regulations<br />
and guidelines concerning e-money and MFSs. Some<br />
governments adopted a “test and learn” approach<br />
before developing these regulations. Examples of<br />
countries taking this approach include: Kenya and<br />
Uganda. They have developed guidelines which<br />
mandated the business environment following its<br />
maturity. Whilst other nations developed guidelines<br />
and regulations whilst their local MFS sectors were<br />
still nascent. Countries falling into this category<br />
include Ghana, Nigeria, and South Africa.<br />
Irrespective of the guidelines and regulations<br />
adopted, all have required, to varying degrees,<br />
collaborations between mobile network operators<br />
(MNOs) and financial institutions. Within the<br />
Eastern and Southern parts of Africa: Vodafone<br />
(through a large stake in Safaricom – owner of<br />
M-Pesa) and Airtel prove dominant. However,<br />
Safaricom (M-Pesa) is facing strong challenge<br />
from Equity Bank’s offering through Equitel<br />
(its telecommunications subsidiary). In the<br />
Northern and Western parts Orange is dominant,<br />
particularly in the French speaking nations like<br />
Tunisia, Cameroon and Ivory Coast.<br />
There are four technology firms which dominate<br />
Northern and Western African collaborations:<br />
Mahindra Comviva, Tagiattitude, Pyro Mobile<br />
Money, and Verifone. These four technology<br />
companies are responsible for supporting 40<br />
percent of all the MFSs operating in these regions.<br />
This has mainly been as a result of the longstanding<br />
relationships these firms have built with<br />
MNOs. When entering new markets MNOs have<br />
tended to replicate their operations and bring<br />
their existing technology partners along with them.<br />
Part 3 – Derivatives and Drivers: Secondary<br />
Effects and Start-up Enablers<br />
This chapter concentrates on the secondary<br />
effects of FinTech and its supporting mechanisms<br />
(incubators, accelerators and co-working spaces)<br />
across the continent. The range of possible<br />
effects tested varies from the highly theoretical<br />
and economic, to the behavioural changes arising<br />
due to the growth of MFS and FinTech as a whole.<br />
Preliminary studies (as the service is under<br />
10-years old) demonstrate that MFS operations do<br />
not have an effect on inflation. This is contrary<br />
to the common economic maxim that increased<br />
money volatility, which MFS causes, results in higher<br />
inflation.<br />
Though MFS has been marketed as leading to<br />
financial inclusion, some have questioned its<br />
ability to contribute to this dimension. They have<br />
suggested that these products only appear<br />
to attract those already banked populations.<br />
Evidence indicates that though early adopters are<br />
generally urban, more educated, and wealthier; as<br />
time progresses more rural, uneducated and less<br />
financially solvent populations adopt the products<br />
too. There is also strong potential for MFS to be<br />
used more frequently in micro-finance institutions,<br />
conditional and non-conditional cash transfers,<br />
government payments and more sophisticated<br />
financial products.<br />
We also provide a list of some the many accelerator<br />
and incubator programmes which exist in<br />
Africa. Some of the well-known programmes are<br />
internationally run such as Barclays Tech Lab<br />
(South Africa) or Startupbootcamp (South Africa<br />
and Kenya). However, there are many programmes<br />
which have been locally developed and are proving<br />
hugely successful. This is particularly the case in<br />
Northern Africa with Tahir2, Flat6Labs, and Plug<br />
and Play (all based in Egypt). Some other influential<br />
incubators and accelerators are MEST, iSpace and<br />
Impact Hub Accra (Ghana); iHub (Kenya), xHub<br />
Innovation Society and iceaddis (Ethiopia).<br />
5
DEFINITIONS<br />
Accelerator (programme)<br />
These are fixed-term, cyclical programmes which<br />
include mentorship, training aspects, and usually<br />
culminating in a presentation or pitch event/ demo day.<br />
Agent<br />
Any third party acting on behalf of a bank or other<br />
financial services provider (including an e—money<br />
issuer or distributor) to deal directly with customers.<br />
The term ‘agent’ is commonly used even if the<br />
commonly used principle-agent relationship does not<br />
exist under the law of the country in question.<br />
Anti-money laundering / Combating the financing<br />
of terrorism (AML/CFT)<br />
A set of rules, typically issued by central banks, that<br />
attempt to prevent and detect the use of financial<br />
services for money laundering or to finance<br />
terrorism. The global standard-setter for AML/CFT<br />
rules in the Financial Action Task Force (FATF).<br />
Bank-based model<br />
A mobile financial services business model (bank-led<br />
or nonbank-led) in which:<br />
i) The customers has a contractual relationship with<br />
the bank and,<br />
ii) The bank is licensed or otherwise permitted by the<br />
regulator to provide the financial services<br />
Bank-led model<br />
A mobile financial service business (bank-based or<br />
non-bank based) in which the bank is the primary<br />
driver of the product or service, typically taking the<br />
lead in marketing, branding, and managing customer<br />
relations.<br />
Business-to-Government (B2G)<br />
Business to government payment e.g. the payment of<br />
taxes or other government fees.<br />
Business-to-Person (B2P)<br />
Business to person payment e.g. salary payments<br />
Branchless Banking<br />
Delivery of financial services outside conventional<br />
bank branches. Banking beyond branches uses<br />
agents or other third party intermediaries as the<br />
primary point of contact with customers and relies<br />
on technologies such as card-reading point-of-sale<br />
(POS) terminals.<br />
Conditional Cash Transfer (also Non-conditional<br />
cash transfers)<br />
Programmes aimed at reducing poverty by providing<br />
incentives (such as money or vouchers) conditional<br />
on the recipients’ actions. Non-conditional cash<br />
transfers are not dependent on the recipients’<br />
actions.<br />
Crowdfunding<br />
The process of raising capital for a project or venture<br />
through a collection of (typically public) donors.<br />
E-Money<br />
A type of monetary value electronically recorded<br />
and generally understood to have the following<br />
attributes:<br />
i) Issued upon receipt of funds in an amount no<br />
lesser in value than the value of the e-money<br />
issued;<br />
ii) Stored on electronic device (e.g. a chip, prepaid<br />
card, mobile phone, or computer);<br />
iii) Accepted as a means of payment by parties other<br />
than the issuer; and<br />
iv) Convertible into cash<br />
E-Money Issuer<br />
The entity that initially issues e-money against receipt<br />
of funds. Some countries only permit banks to issue<br />
e-money (see Bank-based model) whereas other<br />
countries permit non-banks to issue e-money (see<br />
non-bank based model).<br />
E-Money Account<br />
An e-money holder’s account that is held with the<br />
e-money issuer. In some jurisdiction, e-money<br />
accounts may resemble conventional bank<br />
accounts, but are treated differently under the<br />
regulatory framework because they are used for<br />
different purposes (for example, as a surrogate<br />
6
for cash or a stored value that is used to facilitate<br />
transactional services).<br />
Float // e-float<br />
The total outstanding amount of e-money maintained<br />
on the premises by an e-money issuer.<br />
Formal financial services (formally banked)<br />
Financial services offered by regulated institutions<br />
as opposed to informal financial services, which are<br />
unregulated. Some examples of regulated institutions<br />
include banks, remittance services providers,<br />
microfinance institutions and MNOs.<br />
Financial deepening<br />
The development of a financial services system<br />
facilitating the provision of a range of financial assets<br />
in the economy.<br />
Financial inclusion<br />
The delivery of formal financial services at an<br />
affordable cost to all populations.<br />
FinTech<br />
The use of technology to improve the efficiency of the<br />
financial services sector. It covers both:<br />
a) Traditional FinTech: Represents those larger, wellknown<br />
firms providing supportive data and services<br />
for ‘brick and mortar’ financial services firms.<br />
b) Emergent/ Disruptive FinTech: Smaller businesses<br />
and start-ups relying more on big data analysis,<br />
mobile and internet technologies.<br />
Government-to-Person (G2P)<br />
Government to person payment e.g. to include the<br />
receipt of government benefits and salary payments.<br />
Incubator (programme)<br />
These are development programmes for start-ups.<br />
They are generally more flexible and make no requests<br />
for equity in the firm, unlike accelerator programmes<br />
(See above). These programmes often offer<br />
management training, consulting, and office space too.<br />
Informal financial services<br />
Financial services offered by unregulated entities.<br />
Examples of informal financial services are susu<br />
collection in Ghana, loan shark lending, and informal<br />
saving groups.<br />
Interoperability<br />
The ability of users of different mobile money<br />
services to transact directly with each other.<br />
Know Your Customer (KYC)<br />
Rules related to AML/CML which requires providers to<br />
carry out measures to identify a customer.<br />
Mobile Banking (m-banking)<br />
A service allowing customers to access their bank<br />
accounts via a mobile phone; sometimes, they are<br />
also able to initiate transactions. It is a sub-set of<br />
mobile financial services (See below).<br />
Mobile Financial Services (MFS) // Mobile Money<br />
A service with which the mobile phone is used to<br />
access a variety of financial services from banking to<br />
insurance, loans and savings.<br />
Mobile money transfer // Person-to-person<br />
(P2P)<br />
A payment of value that is made from a mobile wallet,<br />
accrues to a mobile wallet, and/ or is initiated using a<br />
mobile phone.<br />
Mobile payment (m-payment)<br />
Sometimes, the term payment is used to describe only<br />
transfers to pay for goods and services, either at the<br />
point-of-sale (retail) or remotely (bill payments).<br />
Mobile Network Operator (MNO)<br />
A company that has a government-issued license<br />
to provide telecommunications services through<br />
mobile devices.<br />
Mobile wallet<br />
A financial account that is primarily accessed using a<br />
mobile phone.<br />
Non-bank based model<br />
A mobile financial services business model (bank-led<br />
or non-bank led) in which:<br />
i) The customer has a contractual relationship with a<br />
non-bank financial services provider and,<br />
7
ii) The non-bank is licensed or otherwise permitted by<br />
the regulator to provide the financial service(s).<br />
Non-bank led model<br />
A mobile financial services business model (bankbased<br />
or non-bank-based) in which the non-bank is<br />
the primary driver of the product or service, typically<br />
taking the lead in marketing, branding, and managing<br />
the customer relationship.<br />
Person-to-Government (P2G)<br />
Person to government payments e.g. payment of<br />
taxes, fees, fines or for services.<br />
Payment Service Provider<br />
An entity providing services that enable funds to be<br />
deposited into an account and withdrawn from an<br />
account; payment transactions (transfer of funds<br />
between, into or from accounts); issuance and/ or<br />
acquisition of payment instruments that enable the<br />
user to transfer funds (e.g. checks, e-money, credit<br />
cards and debit cards); and money remittances and<br />
other services central to the transfer of money.<br />
Point-of-Service (POS)<br />
A retail location where payments are made for goods<br />
or services.<br />
Third Party Provider<br />
Agents and other acting on behalf of a mobile<br />
financial service provider, whether pursuant to a<br />
services agreement, joint venture agreement, or<br />
other contractual arrangement.<br />
Unbanked<br />
Potential customers, usually the very poor, who do<br />
not have a bank account or a transaction account at<br />
a formal financial institution.<br />
Under-banked<br />
Customers who may have access to a basic<br />
transaction account offered by a formal financial<br />
institution, but still have financial needs that are<br />
unmet or not appropriately met. For example, they<br />
may not be able to send money safely or affordably.<br />
8
PART 1:<br />
COUNTRY<br />
HIGHLIGHTS<br />
Established Players<br />
and Rising Stars<br />
ESTABLISHED<br />
PLAYERS<br />
(SANGK)<br />
In this section we consider the four<br />
established players on the continent –<br />
South Africa, Nigeria, Ghana, and Kenya<br />
(SANGK). The first part of the analysis is a<br />
summary of their governments’ stance on<br />
the Information and Computing Technology<br />
(ICT) and Financial sectors. It is an overview<br />
of how the government aims to harness the<br />
power of these two sectors to achieve its<br />
wider development goals.<br />
In the second part, the training, skills<br />
development initiatives and human resource<br />
environment is explored. It provides insight<br />
not only from a governmental viewpoint,<br />
but also from a business one too.<br />
9
South Africa<br />
Ownership 4<br />
Population: 54 million 1<br />
Adult population over 15 years old<br />
(% from MRV figures) 2 : 69.4<br />
Nominal GDP/ Growth (2014) 3 : 349,817; 1.5<br />
Smartphone 34<br />
Non-smart<br />
mobile phone 55<br />
No phone 10<br />
Percentage of Formally Banked 2014 3 : 69<br />
SUMMARY<br />
In the <strong>2015</strong> budget speech the South African Minister of<br />
Finance, Nhlanhla Nene, highlighted the government’s<br />
immediate priorities 5 . The nine-point plan outlined the<br />
government’s strategy for building a sustainable and<br />
innovative economy. Two of the points focused on<br />
unlocking small business potential and encouraging<br />
private investment in dynamic sectors. The end vision<br />
was to ensure greater inclusion of the population<br />
who currently remain economically inactive.<br />
South Africa was ranked second overall in the <strong>2015</strong><br />
Brookings Financial and Digital Inclusion Project<br />
(FDIP) Report and Scorecard 6 . The report evaluated<br />
21 developing countries against a number of<br />
criteria relevant to financial inclusion one of which<br />
includes mobile capacity. It ranked first for country<br />
commitment, adoption of traditional and digital<br />
financial services, and regulatory environment.<br />
Innovation is not new to financial services in South<br />
Africa; the country was the first in the world to<br />
set up a Faster Payments system, and four of<br />
the five major banks incorporate a banking app<br />
(bar Capitec). While these banks have developed<br />
some great technology solutions, there’s a lack of<br />
interoperability between banks.<br />
Telecommunications giants, Vodacom and MTN, have<br />
taken advantage of traditional banking’s weakness<br />
by dominating MFS. They have introduced financial<br />
services to the quarter of the population that<br />
remains unbanked; providing real-time, person-toperson<br />
(P2P) payment capabilities via their respective<br />
offerings, M-Pesa and Mobile Money.<br />
On the ground<br />
The startup culture in the country’s FinTech scene<br />
is thriving and in <strong>2015</strong> three South African FinTech<br />
start-ups made the majority of finalists at the SWIFT<br />
Innotribe regional showcase in Cape Town, moving<br />
on to represent the continent with two other African<br />
start-ups at the international showcase.<br />
The start-ups are YueDiligence, 2Quins, and ZAQ<br />
Finance. YueDiligence is a due diligence tool for<br />
entrepreneurs, investors, and service providers<br />
to assess deal readiness. 2Quins is a financial<br />
information tool that assists in meeting banks’<br />
operational and regulatory reporting requirements<br />
more efficiently; and ZAQ Finance is a debt reduction,<br />
savings, and low-cost credit products service for lowincome<br />
Africans to become more financially secure.<br />
Networking organisations, incubators, accelerators,<br />
and major events have been emerging since the turn<br />
of the century to nurture and support technology<br />
entrepreneurs.<br />
Some national initiatives include mLab Southern<br />
Africa, a vertical accelerator focused on mobile<br />
innovation and start-ups. It is backed by the World<br />
Bank, the Department of Science and Technology,<br />
among others. Tech4Africa acts as one of Africa’s<br />
biggest web, mobile and emerging technology<br />
conferences and annually hosts the Ignite startup<br />
competition which gives African start-ups exposure to<br />
vital industry players. Another initiative, Entrepreneur<br />
Traction, bridges the gap between potential young<br />
technology entrepreneurs and influential CEOs and<br />
venture capitalists.<br />
Cape Town - The Cape IT Initiative (CiTi) is a nonprofit<br />
organisation infusing the Western Cape’s<br />
technology sector and tech-enabled industries<br />
like financial services, retail and government. The<br />
Bandwidth Barn (forming part of CiTi), operating<br />
since 2000, is regarded as one of the leading ICT<br />
incubators in the world. They’ve set up a Bitcoin hub<br />
as well as a Virtual Reality community — both firsts in<br />
South Africa – and this year (<strong>2015</strong>) they also unveiled<br />
10
Barn Khayelitsha — a co-working support hub for<br />
entrepreneurs in the area.<br />
Barclays Africa also launched its Tech Lab Africa<br />
accelerator programme in Cape Town this year.<br />
It helps connect a global network of start-ups,<br />
corporate firms, and innovators. The venture aims<br />
to accelerate South Africa’s FinTech and digital health<br />
industry by helping scale innovative solutions.<br />
Johannesburg – In <strong>2015</strong>, AlphaCode launched<br />
in Sandton as the club for ‘next-generation<br />
entrepreneurs in South Africa’s financial services<br />
industry’. It facilitates networking, co-working, and<br />
mentorship. JoziHub is an incubator backed by<br />
Omidyar and Google, and is aimed at connecting<br />
potential entrepreneurs and developers with critical<br />
resources. This year, Standard Bank launched its<br />
Standard Bank Incubator Programme to create<br />
and develop entrepreneurs in South Africa, and is<br />
accompanied by the incubator co-working space in<br />
Rosebank.<br />
HR/ PEOPLE ASPECTS<br />
According to the 2014 skills trend survey by the<br />
Witwatersrand University’s Joburg Centre for<br />
Software Engineering (JCSE) on South Africa’s ICT<br />
sector, South Africa lacks critical skills and is falling<br />
behind countries that place greater emphasis on<br />
the contribution of technology to economic growth 7 .<br />
Countries like Kenya (who ranked first in the FDIP<br />
report), Nigeria, and Egypt.<br />
Mathematics Pass Rates: 2013/2014<br />
2014 <strong>2015</strong><br />
Only 10% of student who<br />
enter the basic education<br />
achieve a pass in math or<br />
science subjects.<br />
Number of those who<br />
passed maths (achieving<br />
30 % or more) dropped<br />
from 59.1 to 53.5 per cent.<br />
New and emerging technologies are creating a<br />
strong demand for certain skill sets; and South Africa<br />
is lagging behind due to a deficit in the number of<br />
graduates in the science, technology, engineering,<br />
and mathematics (STEM) fields. Roughly only 10 percent<br />
of students who enter the basic education system<br />
achieve a pass in math or science subjects. The<br />
number of matric learners who passed mathematics<br />
in 2014 – attaining above 30 percent – dropped to<br />
53.5 percent from 59.1 percent in 2013. The pass rate<br />
for physical science dropped nearly six percentage<br />
points in the same period.<br />
Telkom Business reported on their blog in April<br />
that it estimated between 30,000 to 70,000 skilled IT<br />
workers needed to enter the system in South Africa<br />
to solve the national IT skills challenge 8 . Professor<br />
Barry Dwolatzky, director of the JCSE, says digital<br />
technology is the route to absorb some of the youth<br />
unemployment in the country, which is currently twoand-half<br />
times that of adult unemployment. He warns<br />
that South Africa has to create future generations of<br />
tech savvy youth who can ‘use, adapt, and improve<br />
on the technology of the day’. “We are at risk of<br />
losing an entire generation if vital steps are not<br />
taken,” he said, adding that South Africa will not be<br />
able to achieve its National Development Plan without<br />
the contribution of an effective ICT sector.<br />
One study highlighted some of the problems<br />
disadvantaged areas in South Africa have in<br />
developing students’ ICT capabilities 9 . Among the<br />
issues identified include the poor computer to student<br />
ratio, difficulty in access to the internet, and a lack of<br />
use of ICT involvement in schools’ general curricula.<br />
MICT (Media, Information and Communication<br />
Technologies) Sector Education and Training Authority<br />
(SETA) is the body responsible for skills development<br />
in sectors including IT and telecommunications. MICT<br />
SETA have drafted a list of scarce and critical skills.<br />
They have identified these in collaboration with<br />
industry stakeholders – that includes vendor-specific<br />
technical skills sets covering Oracle, Cisco, SAP, and<br />
Microsoft – and used the research to develop the<br />
Sector Skills Plan.<br />
The plan is aimed at partnering with companies<br />
within the MICT sector to address these critical skills<br />
by training employees and unemployed candidates.<br />
The Plan indicated a demand for 6,281 potential<br />
vacancies in MICT by March 2014 with an emphasis on<br />
qualifications of the necessary market-level required<br />
by IT sub-sectors. In its most recent report published<br />
in <strong>2015</strong>, the MICT SETA noted that it had achieved<br />
or even exceeded all its planned targets. These<br />
overachievements were primarily due to increased<br />
stakeholder participation from businesses and<br />
educational establishments.<br />
11
Nigeria<br />
Ownership 12<br />
Population: 177.5 million 10<br />
Adult population over 15 years old<br />
(% from MRV figures): 54.4<br />
Nominal GDP/ Growth (2014): 568,508; 6.3<br />
Smartphone 27<br />
Non-smart<br />
mobile phone 62<br />
No phone 11<br />
Percentage of Formally Banked 11 : 44<br />
SUMMARY<br />
To reduce its dependency on oil revenues the<br />
Nigerian government put in place a 10-year<br />
strategy, announced in 2012, to diversify its<br />
economy. Already one of its growth areas, the<br />
government focussed on improving the efficiency<br />
of its finance sector, which between 2009 and 2013,<br />
doubled in the percentage share it accounted for<br />
in government revenue 13 .<br />
Seizing this opportunity, in October 2012, the<br />
Central Bank of Nigeria (CBN) announced its<br />
intentions – through the Financial Inclusion<br />
strategy – to increase financial access to 70 percent<br />
of the population in areas concerning remittances,<br />
savings, pension and insurance.<br />
Under its “cash-lite society” initiative originally piloted<br />
in Lagos, it has sought to reduce the high reliance on<br />
cash payment within the country. The initiative hopes<br />
to modernise the payment system and improve the<br />
effectiveness of monetary policy. The scheme was<br />
rolled out to another six centres in 2013, accounting for<br />
nearly 90 percent of cash centres in the country. CBN<br />
has also issued regulations concerning MFS and has<br />
so far issued 20 licences to firms offering the service.<br />
The government has demonstrated its equal level<br />
of commitment to its ICT sector. The telecoms<br />
market in Nigeria is open, highly competitive and<br />
in 2014 contributed 8.34 percent to Nigeria’s total<br />
GDP 14 . In June 2012, the Ministry of Communication<br />
Technology released its National Information<br />
and Communication policy intended to promote<br />
universal access to ICT and make the sector more<br />
attractive for businesses and entrepreneurs. This<br />
multi-layered policy included efforts to enhance ICT<br />
skills in schools, streamline regulation and taxation<br />
within the sector, and bring uniformity in how ICT<br />
was used in government ministries.<br />
Its success in this area was recognised in the 2013 UN<br />
Public Service Awards (Category 4: Promoting Wholeof-Government<br />
in the Information Age) where Nigeria<br />
took first place. Prior to that in 2011, Nigeria had also<br />
received the support of the International Finance<br />
Corporation (IFC), in promoting ‘Village Phone’ – a<br />
concept extending telecommunication services to<br />
rural areas.<br />
On the ground<br />
This has been supported by a number of measures<br />
within the country’s ecosystem. The Federal Ministry<br />
of Communications Technology (FMCT), through<br />
its Nigeria Federal Open Data Initiative, hopes to<br />
stimulate innovation and economic growth by opening<br />
government data. As well as the government’s push<br />
for a cash-lite society and ICT investment, there is<br />
also a high level of entrepreneurial culture which<br />
exists in Nigeria. Two areas are garnering significant<br />
attention: e-commerce and FinTech (specifically MFS).<br />
Within the e-commerce space, the leaders are<br />
Konga and Jumia who have received backing of<br />
$40million and $150 million respectively to expend their<br />
operations in the country. Of the many FinTech players<br />
providing MFSs, Fortis Mobile Money is one of the<br />
most well-known and is still growing. Henry Nwawuba,<br />
Fortis Mobile’s Managing Director, said the company<br />
planned to deploy an additional 50,000 agents across<br />
the country. This is after the initial success recorded<br />
in Lagos where it has 950,000 users due primarily to its<br />
partnership with Nigeria’s largest telecom network,<br />
MTN Nigeria.<br />
Though there are pockets of innovative centres<br />
around the country such as Wennovation Hub (which<br />
coaches and mentors start-up firms) in Ibadan; the<br />
12
majority of activity occurs in Lagos, the country’s<br />
former capital.<br />
Lagos – Most notable among them is ccHUB: a<br />
community, open living lab and pre-incubation<br />
centre: essentially facilitating connections in the city;<br />
and Spark (an office space and accelerator hybrid)<br />
which is supporting firms. Of the better recognised<br />
growing firms are Vogue Pay and PagaTech – both<br />
payment processing providers.<br />
Since VoguePay’s launch in 2012, it has processed<br />
over 950,000 transactions worth over N900 million<br />
($4.5 million) in Lagos alone. PagaTech first came<br />
to international promin ence when it attracted the<br />
attention of Silicon Valley venture capitalists. To date<br />
the firm has over 3 million users across the country,<br />
making it the undisputed leader among the payment<br />
provider service led MFS firms. Other MFS firms<br />
making headway in Lagos are E-transact with 250,000<br />
users, PayCom with 210,000 and Mkudi Mimo slightly<br />
behind on 190,000 users.<br />
users<br />
Mobile Money Subscriber Numbers<br />
(Nigeria)<br />
3 m<br />
250,000<br />
210,000<br />
190,000<br />
PagaTech E-Transact PayCom Mkudi Mimo<br />
HR/ PEOPLE ASPECTS<br />
There have been several changes in the human<br />
resource capabilities of Nigeria’s ICT and<br />
banking sectors. The country’s banking industry<br />
recapitalisation policy implemented in 2004/2005<br />
resulted in a spate of organisational reforms. The<br />
policy forced several banks to enter into merger<br />
and acquisition deals resulting in retraining for<br />
new positions, redundancies and organisational<br />
restructuring programmes. According to one<br />
research paper 15 the policy has transformed the<br />
Nigerian banking sector into slave banks: adopting<br />
more authoritative approaches through harsher<br />
human resources (HR) policies.<br />
As a result of these changes HR employees were<br />
also forced to “align their HR strategy and practices<br />
with the business strategy of the banks”. This was<br />
essentially a move away from the traditional routine<br />
processes many HR employees had previously<br />
undertaken, known as personnel administration.<br />
Technology firms such as Cisco and Oracle have also<br />
mentioned the difficulty in recruiting for ICT skilled<br />
individuals in the Nigerian banking sector 16 . In a<br />
recent roundtable summit, the country manager of<br />
Oracle, Adebayo Sanni, among other top executives<br />
from other IT firms, stated that there is urgent need<br />
to address the IT skills gap in the country, particularly<br />
in the banking sector.<br />
To further validate this fact, a survey by the<br />
Convention on Business Integrity shows that 39<br />
percent of firms in the country are struggling to<br />
recruit workers into specialised IT positions, and they<br />
believe that this shortage of ICT experts will persist<br />
for the next three years (until 2018/2019). Cisco also<br />
laments this dearth in ICT skills in Nigerian banking<br />
sectors and other industries. They estimate that<br />
30,000 to 70,000 skilled IT positions are required<br />
annually, and question the country’s ability to recruit<br />
for these roles 17 .<br />
Moreover, due to the banking sector’s intense<br />
competition many firms have implemented radical<br />
upgrades to their IT technologies. This has prompted<br />
significant staff training programmes to update the<br />
organisation’s understanding of these new systems.<br />
It has placed greater pressure on these firms’<br />
learning and development functions. One paper 18<br />
posited that in line with technological advancement<br />
there is a need for HR capacity development in the<br />
Nigerian banking sector.<br />
13
Ghana<br />
Ownership 21 Smartphone 14<br />
Population: 26.7 million 19<br />
Adult population over 15 years old<br />
(% from MRV figures): 59.7<br />
Non-smart<br />
mobile phone<br />
69<br />
Nominal GDP/ Growth (2014): 38,648; 4.2<br />
No phone 17<br />
Percentage of Formally Banked 20 : 35<br />
SUMMARY<br />
In October <strong>2015</strong>, the Ministry of Education in Ghana<br />
held a workshop to finalise its framework on how best<br />
to introduce and promote ICT into Ghana’s education<br />
system. The event led to the finalisation of the<br />
policy document needed to actualise the country’s<br />
ambitions. In recent years the government in an<br />
attempt to improve ICT in the country has distributed<br />
over 60,000 laptops to school students. It has also<br />
given over 50,000 teachers training on ICT as part of<br />
its Better Ghana ICT Agenda 22 .<br />
Within finances specifically, Ghana has recently<br />
completed the implementation of the Ghana<br />
Integrated Financial Management Information<br />
System (GIFMIS) designed to modernise its budgeting<br />
and public expenditure system; and improve the<br />
efficiency of its revenue collection. The construction<br />
of GIFMIS coincided with the eGhana project which<br />
aimed to improve citizen access to information and<br />
transaction capabilities 23 . The government (via the<br />
Bank of Ghana – BOG) has aims to increase financial<br />
inclusion and is doing this through MFS. Following talks<br />
with financial services and telecommunication firms<br />
it amended MFS regulations making the system less<br />
“cumbersome” 24 .<br />
In March 2014, The BOG also released its National<br />
Payment Strategy – Strategic Payment Roadmap for<br />
Ghana. Of its many initiatives was the development<br />
of a Ghanaian Payments Council to address and<br />
ensure ‘buy-in’ from the various stakeholders<br />
involved in payment services. The Strategy also<br />
included plans to develop ‘ePayment and eMoney<br />
regulations’ by emulating the legislative practices<br />
in Australia and India for the former, and UK for<br />
the latter. Additionally it outlined the government’s<br />
plans to ensure all employees in the country are<br />
paid electronically by 2020.<br />
On the ground<br />
According to the National Communications Authority<br />
(NCA) of Ghana, the number of mobile phone users<br />
increased from 28.8 million in April 2014 to over 32.3<br />
million in August <strong>2015</strong> 25 . This figure shows mobile<br />
phone ownership outnumbers Ghana’s population of<br />
26.7 million by a ratio of 1:1.2.<br />
The number of MFS users has increased rapidly<br />
in recent years after a slow start. It has helped<br />
improve access to financial inclusion by 16 percent<br />
between 2010 and 2014 26 . The industry is led by MTN<br />
Mobile Money, followed by Tigo with Tigo Cash, and<br />
thirdly Airtel’s offering Airtel Money. Since it debuted<br />
in 2009, MTN Mobile Money – the market leader – has<br />
gained a subscriber base of 4.8 million with monthly<br />
transaction volumes of over GHS 18.5 million ($4.6<br />
million) per month.<br />
MTN Mobile Money (Ghana)<br />
4.8 million<br />
Subscriber Base<br />
18.5 million ($4.6 million)<br />
per month<br />
Transaction volumes<br />
Besides the telecommunication companies operating<br />
MFS, other non-bank and non-MNO companies also<br />
14
un cashless payment systems in Ghana. ExpressPay<br />
is operated Expresspay Ghana Limited, while MPower<br />
Payments and Slydepay are operated by SMSGH and<br />
Dreamoval Limited respectively. These payment<br />
provider services allow users to load funds from<br />
their bank accounts or preferred electronic wallet<br />
onto their account, enabling them to shop online,<br />
transfer funds or receive funds from anyone –<br />
locally or internationally.<br />
There are also several hubs and supportive<br />
networks within the ecosystem of Ghana. One notable<br />
organisation is mFriday, a non-profit mobile web lab.<br />
In late 2012, the group collaborated with Vodafone<br />
Ghana and Kwame Nkrumah University of Science &<br />
Technology (KNUST) to develop TechHub, billed as the<br />
foremost mobile and web laboratory in Ghana. It is<br />
based in Kumasi, the capital of Ashanti; though most<br />
of Ghana’s technology ecosystem is based in Accra,<br />
the capital of Ghana.<br />
Accra – The city is host to Meltwater Entrepreneurial<br />
School of Technology (MEST) an incubator programme<br />
providing training and mentoring for technologybased<br />
start-ups in the West African region. One of<br />
their alumni includes Beam; a firm assisting overseas<br />
based Ghanaians make both bill and gift payments for<br />
relatives and friends still in the country.<br />
Other notable programmes include iSpace Accra and<br />
Impact Hub Accra both supporting new technology<br />
talent. These are joined by the Ghana-India Kofi<br />
Annan Centre of Excellence in ICT (AITI-KACE) a<br />
joint project between the Indian and Ghanaian<br />
government to stimulate the growth of the ICT<br />
sector. The government also launched an ambitious<br />
HOPE City project, to be based just outside of Accra.<br />
The project, estimated at £6.6 million ($9.8 million) will<br />
serve as an IT hub and architectural landmark; and is<br />
set to become the tallest building in Africa 27 .<br />
HR/ PEOPLE ASPECTS<br />
The Ghana Investment Fund for Electronic<br />
Communication (GIFEC) is tasked with the provision<br />
of ICT, internet connectivity and infrastructure on<br />
behalf of the Ministry of Communication. Of its many<br />
projects is the training of citizens on ICT. The training<br />
is delivered through their nationwide network of<br />
Community Information Centres (CICs). However,<br />
these sessions only cover the basics rather than<br />
the more advance ICT skills needed in the FinTech<br />
sector. Nevertheless these basic desktop and<br />
internet related training models provide the much<br />
needed ICT skills in the country.<br />
According to the Ministry of Communication, since<br />
2010 300 CICs have been built and supplied with over<br />
2,100 computers. Though only 56 percent of these<br />
CICs are equipped with the internet, they supplement<br />
the low rate of internet subscription in Ghana. The<br />
most recent (2013) statistics released by the Ministry<br />
of Communications shows that less than 10 percent<br />
of Ghanaians are internet subscribers. The level of<br />
internet connectivity in schools is relatively high at 69<br />
percent, but recent studies have still evaluated the<br />
level of connectivity, schools’ ICT laboratories and<br />
even ICT teachers as “inadequate” 28 .<br />
Beyond the ICT skills gap, there is also a shortage<br />
of adequate graduates needed to fulfil the roles in<br />
the FinTech sector. It is a view expressed by many in<br />
government 29 , tertiary education 30 , and those within<br />
the business sector. Many Ghanaian entrepreneurs<br />
have themselves expressed a lack of confidence in<br />
their business acumen, with only 14 percent believing<br />
they possess the skills necessary to manage a firm 31 .<br />
As a result many firms choose in-house training and<br />
refresher courses, but face the high possibility of<br />
flight risk and competition from the banking and<br />
public sectors.<br />
This skills gap is clearly understood and there have<br />
been several initiatives and projects supported by<br />
the World Bank to address it. In 2006, it approved<br />
the Micro, Small and Medium Enterprise Project led<br />
by the Ghanaian Ministry of Trade and Industry. The<br />
project, recently completed in <strong>2015</strong>, met its objective<br />
to improve the employability of Ghanaian citizens.<br />
The AITI-KACE, noted above, also addresses some<br />
of these skills gaps by offering courses to improve<br />
both ICT and management skills.<br />
15
Kenya<br />
Ownership 34 Smartphone 15<br />
Population: 44.9 million 32<br />
Adult population over 15 years old<br />
(% from MRV figures): 57<br />
Non-smart<br />
mobile phone<br />
67<br />
Nominal GDP/ Growth (2014): 60,937; 5.3<br />
No phone 18<br />
Percentage of Formally Banked 33 : 55<br />
SUMMARY<br />
Government<br />
Kenya’s main strategic plan is Kenya Vision 2030<br />
which aims to transform the state into a “middle<br />
income country providing a high quality of life” for its<br />
citizens. The plan outlines a structure consisting of<br />
three pillars, from which eight key foundations exist.<br />
Among these foundations is science, technology and<br />
innovation (STI).<br />
One of its many flagship projects is the creation of<br />
the Konza Technology City (KTC), a technology hub<br />
and economic driver for businesses and start-ups.<br />
It is expected to create over 17,000 jobs (projected<br />
realisation, 2018); and to be one of the main<br />
contributors to Kenya Vision 2030’s aim to achieve an<br />
annual growth rate of 10 percent in GDP until 2030.<br />
The project builds on Kenya’s on-going commitment<br />
to strengthen its ICT sector; through The East<br />
African Marine System (TEAMS) and Notational<br />
Optic Fibre Backbone Infrastructure (NOFBI).<br />
These network systems are intended to make the<br />
country more globally connected 35 ; and improve<br />
Kenya Financial Inclusion Targets:<br />
Bank Deposits and Financial Exclusion<br />
80%<br />
44%<br />
Bank Deposits<br />
85%<br />
70%<br />
Financially Excluded<br />
communication between Nairobi and other key towns<br />
in Kenya respectively. The latter will also aid Kenya<br />
in its communication with their government service<br />
delivery too, facilitating the use of e-government 36 .<br />
Government support for finance “through improved<br />
access and deepening of financial services and<br />
products” also directly speaks to FinTech, and more<br />
specifically MFS. Among its many medium term goals<br />
are to: increase bank deposits (from 44 to 80 percent),<br />
reduce the share of those financially excluded from<br />
85 to 70 percent, and encourage greater use of ICT<br />
in the financial sector 37 .<br />
On the ground<br />
The critical success factor for banks and insurers in<br />
Kenya today is the ability to meet customers at their<br />
point of convenience. There is unquestionably no<br />
other greater point of convenience than the mobile<br />
phone. According to a <strong>2015</strong> report delivered by Sterling<br />
Capital, a local brokerage firm, more than 90 percent<br />
of Kenya’s working population (the key target market<br />
for banks and insurers) owns a mobile phone 38 .<br />
Safaricom has proven the most successful FinTech<br />
firm in Kenya as a result through its MFS, M-Pesa. It<br />
has managed to capitalise on this unbanked, mobileowning<br />
population resulting in its dominance of the<br />
market. In the last four years, the Kenyan Treasury<br />
has received a total of KSh23 billion ($230 million) in<br />
dividends from Safaricom: no other company has<br />
ever come close to this figure in recent history.<br />
The Kenyan Revenue Authority has also received<br />
at least KSh51 billion ($510 million) in taxes from<br />
Safaricom over the past half-decade, making the<br />
telecommunications firm the single largest tax payer<br />
in Kenya’s history eclipsing amounts paid by the<br />
Teachers’ Service Commission – the employer of all<br />
16
public sector teachers, and EABL, the largest brewer<br />
in East Africa 39 .<br />
The apparent maturity of Kenya’s FinTech space<br />
is perhaps best exemplified by the big deals that<br />
have come to characterize the sector. Waze Tele,<br />
a Kenya based FinTech start-up that integrates<br />
mobile payments into commerce, supply chain and<br />
distribution, was acquired by the AFB Group for $1.7<br />
million in May <strong>2015</strong>. Another Kenyan firm, globally<br />
recognised is the crowdsourcing platform, Ushahidi,<br />
which is headquartered in one of FinTech’s global<br />
cities, Nairobi.<br />
Nairobi – The city is filled with a vibrant technology<br />
ecosystem made up of incubators and accelerator<br />
programmes. Incubator hubs such as Nairobibased<br />
iHub are creating ever more competent app<br />
developers who can come up with good solutions.<br />
From a base of nothing, Nairobi’s iHub technology<br />
hub has grown to more than 3,000 developers,<br />
designers and entrepreneurs 40 . In addition to<br />
incubators, which are producing the next generation<br />
of start-ups, some start-ups have already come to<br />
market with resounding success. One such startup<br />
is FarmDrive, a unique platform transforming<br />
the way farmers get access to financial services.<br />
FarmDrive provides much more than just financing<br />
to smallholder farmers. It also provides record<br />
keeping and data analysis for its users.<br />
HR/ PEOPLE ASPECTS<br />
The primary body responsible for ICT deployment<br />
within Kenya is the Information and Communication<br />
Authority (ICT Authority). Established in 2013, it sits<br />
within the Ministry of Information Communication and<br />
Technology, and aims to develop Kenya into a regional<br />
ICT hub and globally competitive digital economy. Its<br />
current and first strategic plan, The Kenya National<br />
ICT Masterplan: Towards a Digital Kenya, outlines how<br />
ICT will contribute to Vision 2030.<br />
Within its plan the ICT Authority admits that investment<br />
in skills development, especially in comparison with<br />
that made in ICT infrastructure, has been low and<br />
identifies several problems at tertiary level education.<br />
However, the issue appears to lie earlier in the system<br />
at primary and secondary levels of education too.<br />
Of the participants in a UNICEF study (2013) only a<br />
quarter of 12 – 17 year olds had access to the internet<br />
“Several times a day”. The majority, 42 percent,<br />
had access to the internet 2 – 3 times a week 41 . Data<br />
for primary schools is scarce to come by – another<br />
limiting factor in monitoring and improving internet<br />
access – and the latest figures (2007) put computer<br />
use at just 11 percent 42 . This figure is only slightly lower<br />
than 13.5 percent of rural schools estimated to use<br />
computers in 2012 43 .<br />
The plan acknowledges this need and has put in place<br />
the School Laptop project (2014) which includes an<br />
evaluation of the curriculum, training for teachers,<br />
and the provision of broadband connectivity to<br />
schools. However, the project has already faced<br />
heavy criticism for its planning and management.<br />
The ICT Authority has also been building relationships<br />
with industry leaders. In 2012, it partnered with<br />
SAP Africa to develop SAP Skills for Africa, an eight<br />
week programme and exam to boost graduates’<br />
employability skills. More recently in early <strong>2015</strong>, it<br />
signed a Memorandum of Understanding (MOU)<br />
with Microsoft, which will result in the software firm<br />
providing ICT skills training to up to 300,000 teachers<br />
and an accreditation as Microsoft Certified Educators<br />
on successful completion of the programme.<br />
17
Ethiopia (Addis Ababa)<br />
Population: Between 86.6 1 – 96.9 million 2<br />
GDP growth (annual %): 9.9 3<br />
Formally Banked Population (%): 22<br />
Mobile Phone Ownership (%): 23 4<br />
RISING STARS<br />
Lagos in Nigeria, Accra in Ghana, Nairobi in<br />
Kenya and Cape Town in South Africa always<br />
get mentioned as the FinTech hubs on the<br />
African continent.<br />
However, there are other cities that<br />
are seeing a gradual convergence of<br />
favourable factors that will make them<br />
significant in the near future. The following<br />
three cities which fall into this group are:<br />
Addis Ababa (Ethiopia), Cairo (Egypt), and<br />
Luanda (Angola).<br />
The Ethiopian government has put the development<br />
and advancement of ICT at the heart of its strategic<br />
priorities. More specifically, it recognises the<br />
potential this sector can have on financial inclusion,<br />
particularly for its government services. This is<br />
most noticeable in the country’s e-Government<br />
Strategy and Implementation Plan (2011). In it, the<br />
government outlined plans to connect its e-Trade 5<br />
and e-Transport 6 services to the ‘mobile gateway’.<br />
The gateway allows two-way communication between<br />
the government and its citizens via mobile phones<br />
and hand-held devices.<br />
Equally as significant is the Ministry’s investment<br />
in the Ethio-ICT Village. The Village was opened in<br />
March 2013 and attracted the attention of major<br />
telecommunications firms such as Samsung, MTN,<br />
Tecno Mobile, Huawei and ZTE. Spread over 200<br />
hectors, the Park aims to deliver over 300,000 jobs<br />
to Ethiopians 7 , and will no doubt aid the country’s<br />
telecommunication development.<br />
The government recognises the need for MFS to<br />
reach those unbanked millions. In 2012 the National<br />
Bank of Ethiopia, the body in charge of financial<br />
services regulation in the country, issued guidance on<br />
Mobile and Agent Banking Services 8 . The government<br />
has also set itself targets to improve digital financial<br />
services, financial literacy and payments.<br />
The National Bank of Ethiopia has also setup a<br />
Financial Inclusion Council made up of MNOs, banks<br />
and government officials. Many mobile network<br />
providers have been quick to see the potential for<br />
MFS as only 0.03 percent of Ethiopians had a mobile<br />
money account 9 . Within the past year M-Birr (MFS),<br />
HelloCash (MFS) and Online Hasib (e-commerce) have<br />
developed in Ethiopia.<br />
More specifically in the capital, Addis Ababa, there’s a<br />
growing though nascent start-up community. As one<br />
of the goals of the Growth and Transformation Plan<br />
(GTP), a governmental programme to encourage<br />
entrepreneurialism, is the quasi-government entity<br />
the Entrepreneurship Development Centre (EDC). It<br />
is joined by iceaddis and xHub Innovation Society (the<br />
country’s leading technology hubs), as well as the Addis<br />
Ababa Science and Technology University. All three<br />
enterprises are helping to boost the development<br />
of the ICT sector and entrepreneurialism within the<br />
country.<br />
18
Egypt (Cairo)<br />
Population: Between 86.6 10 – 89 .5 million 11<br />
GDP growth (annual %): 2.2 12<br />
Formally Banked Population (%): 14<br />
Mobile Phone Ownership (%) 13 : 53<br />
Egypt has been experiencing relative political stability<br />
and economic growth especially when compared<br />
to the rest of Northern Africa. In 2014, it was one of<br />
only six countries in Africa to have a GDP of over $100<br />
billion standing at $286 billion, Africa’s third largest<br />
after Nigeria and South Africa 14 .<br />
Due to cultural consideration, Cairo has often not<br />
been counted alongside other African cities. It is<br />
commonly seen as a Middle Eastern one. This has<br />
partly played a role in excluding it when writers speak<br />
of emerging African FinTech centres. However, the<br />
country’s position also allows it to easily connect<br />
with European and North African countries; as<br />
well as the Middle East (due to its geographical<br />
and cultural proximity). The country is also highly<br />
influential and active on the international political<br />
stage too 15 . This makes it a great location for startups<br />
to launch into North or Sub-Saharan Africa, or<br />
towards the Middle-East.<br />
Cairo is the largest city in Africa with a population of<br />
approximately 14 million people. This huge market<br />
together with the fact that close to 50 percent of<br />
Egyptians cannot access banking services, make<br />
it a fertile ground for financial service innovation.<br />
Financial inclusion is clearly a priority for the<br />
government and very recently (September <strong>2015</strong>) the<br />
Central Bank of Egypt began a field study looking at<br />
the reasons for financial exclusion in the country 16 .<br />
It is hoped that the results of the study will feed into<br />
the national strategy to extend financial inclusion to<br />
more of the country’s population. It follows on from a<br />
recent partnership announced in March <strong>2015</strong> to extend<br />
financial services to Egyptians. The cooperation,<br />
between MasterCard and the Government of Egypt<br />
(represented by the Ministry of Communication and<br />
Information Technology), will involve the rollout of<br />
a digital ID linking “citizens’ national ID cards to an<br />
existing national m-money platform” 17 .<br />
One of the brands with a growing presence in the<br />
Cairo FinTech space is Dopay, a start-up that enables<br />
employers to easily pay their employees through<br />
mobile technology. The company secured $2 million in<br />
seed funding in April <strong>2015</strong> and was part of Barclays’<br />
accelerator programme in 2014. There has also been<br />
a spate of crowdfunding platforms within Egypt.<br />
The most notable of these being: Shekra (a Shariah<br />
compliant crowdfunding platform), Yomeken, and<br />
Zoomaal.<br />
Angola (Luanda)<br />
Population: Between 24.2 18 – 24.4million 19<br />
GDP growth (annual %): 3.9 20<br />
Formally Banked Population (%): 29<br />
Mobile Phone Ownership (%) 21 : 65<br />
Angola is a leading oil and diamond producer in<br />
Africa. This has made it, after the end of a civil war<br />
that ravaged it between 1975 and 2002, one of the<br />
fastest growing economies in the world. The country<br />
has been experiencing an average annual GDP<br />
growth of 20 percent. Moreover, it is both politically<br />
and economically stable too.<br />
As compared to other African cities Luanda, with a<br />
population of approximately 6 million people, is not a big<br />
city; but according to an estimate by the United Nations<br />
the city will reach 10 million by 2030 22 . Nevertheless, its<br />
economic context and government initiatives make it a<br />
good candidate for a future FinTech hub.<br />
Firstly, the country is seeking to establish itself as a<br />
telecommunications hub on the continent. Current<br />
construction of the South Atlantic Cable System (SACS)<br />
will make it the first undersea cable linking Africa and<br />
South America. It is due for completion a year before<br />
the South Atlantic Express (SAex), another submarine<br />
communications cable between Africa and South<br />
19
America – giving it the first movers’ advantage.<br />
The country already possesses the West African Cable<br />
System (WACS) linking it to Western African countries<br />
too. These projects will provide low latency between<br />
African and Asia, and Africa and Europe. Moreover,<br />
the country launched Angosat1 a communication<br />
satellite in 2014, created in collaboration with Russia,<br />
with the aim of delivering improved infrastructure<br />
for the telecommunications market 23 .<br />
The government’s investment in telecommunications<br />
is clearly gaining traction. Angola is seen as a regional<br />
leader in technology adoption, and experts have<br />
estimated that by 2020, over a fifth of all connection<br />
will be 4G 24 .<br />
There has also been noticeable growth in the country’s<br />
financial sector particularly with the increase in<br />
electronic means payment. Between 2012 and 2013 the<br />
number of Automated Teller Machines (ATMs) and<br />
Automated Payment Terminals (APTs) grew by 11 and<br />
35 percent respectively 25 . Nevertheless, there is still<br />
exclusion from the economy with less than 30 percent<br />
of the country’s population holding a bank account 26 .<br />
Financial innovation will play a major role in reaching<br />
out to the unbanked.<br />
Changing government policy, a ready market in<br />
unbanked population and high GDP growth rates are<br />
the factors defining the next addition to the FinTech<br />
evolution on the continent.<br />
Financial Inclusion in Angola<br />
(Number of Automated Teller Machines<br />
and Automated Payment Terminals)<br />
ATM<br />
APT<br />
20
MFS Potential – Formal banked and mobile penetration rates<br />
Tunisia<br />
NORTH<br />
Morocco<br />
132 27<br />
0.6<br />
WEST<br />
CENTRAL<br />
EAST<br />
135<br />
41<br />
Egypt<br />
Algeria<br />
100 50<br />
118<br />
14<br />
1.1<br />
SOUTH<br />
Relative Population Size<br />
over 180 m<br />
100 m<br />
90 m<br />
80 m<br />
70 m<br />
60 m<br />
50 m<br />
40 m<br />
30 m<br />
20 m<br />
116<br />
Sierra<br />
Leone<br />
44<br />
16<br />
4.5<br />
Ivory Coast<br />
86<br />
Ghana<br />
41<br />
13<br />
34<br />
24.3<br />
44<br />
107<br />
2.3<br />
Nigeria<br />
84<br />
Niger<br />
28<br />
7<br />
3.9<br />
Cameroon<br />
12<br />
1.8<br />
Angola<br />
Congo,<br />
Democratic Republic of<br />
65<br />
29<br />
44<br />
17<br />
9.2<br />
10 m<br />
less 10 m<br />
Mobile Subscription<br />
penetration – <strong>2015</strong><br />
Account<br />
(age 15 +) - 2014<br />
Mobile Account<br />
(age 15 +) - <strong>2015</strong><br />
21
MFS Potential – Formal banked and mobile penetration rates<br />
Relative Population Size<br />
over 180 m<br />
Ethiopia<br />
34 22<br />
100 m<br />
1<br />
90 m<br />
80 m<br />
70 m<br />
60 m<br />
50 m<br />
40 m<br />
30 m<br />
20 m<br />
10 m<br />
less 10 m<br />
52<br />
Uganda<br />
77<br />
Rwanda<br />
42<br />
18.1 Kenya<br />
89 75<br />
44<br />
35<br />
Tanzania<br />
75 40<br />
58.4<br />
Zambia<br />
75 36<br />
12.1<br />
32.4<br />
Zimbabwe<br />
32<br />
108<br />
21.6<br />
Botswana<br />
159<br />
52<br />
20.8<br />
NORTH<br />
South Africa<br />
70<br />
WEST<br />
CENTRAL<br />
EAST<br />
155<br />
14.4<br />
22<br />
SOUTH<br />
Mobile Subscription<br />
penetration – <strong>2015</strong><br />
Account<br />
(age 15 +) - 2014<br />
Mobile Account<br />
(age 15 +) - <strong>2015</strong>
PART 2:<br />
ACROSS THE<br />
CONTINENT<br />
Legislative Framework<br />
and collaborative<br />
efforts in MFS<br />
FINTECH<br />
REGULATIONS<br />
In this section we focus on MFS regulations,<br />
currently the main FinTech product<br />
regulated by many African governments.<br />
Although predominantly dealt with through<br />
a joint collaborative effort between the<br />
central banking and regulatory bodies,<br />
each government differs slightly in its<br />
approach.<br />
Some reacted more quickly than others to<br />
the fast growth of MFS, whilst others have<br />
chosen to adopt a “test and learn” method<br />
allowing the market to shape regulations.<br />
Irrespective of their various approaches it<br />
cannot be denied that the success of MFS<br />
has rested on governments’ reactions:<br />
whether with hesitation or full support of<br />
the growing sector.<br />
23
Northern Africa<br />
TUNISIA<br />
Tunisia already has a significant proportion of its<br />
citizens accessing financial services through its La<br />
Poste service. Though not a bank nor a microcredit<br />
firm, over 6 million of the country’s 11 million have<br />
postal financial accounts. Of those in the country that<br />
are part of a formal financial service, 90 percent of<br />
them are with the La Poste system. La Poste offers a<br />
large array of FinTech products from MFS, domestic<br />
and international remittances (through MoneyGram<br />
and Western Union), bill payments and smartcard<br />
purchases. Nevertheless the Tunisian Central Bank<br />
(Banque Centrale de Tunise – BCT) is still trying<br />
to improve MFS for its citizens through regulatory<br />
reforms.<br />
There are three institutions representing the<br />
government legalization process for the mobile<br />
money service. These are: Banque Centrale de Tunisie<br />
(BCT), the Ministry of Communication Technologies<br />
(MCT), and Société Monétique Tunisie (SMT), which is<br />
a technology arm of the BCT.<br />
a) The Banque Centrale de Tunisie (BCT):<br />
defines the prudential regulation, control and<br />
supervises banks and other financial institutions.<br />
It is the primary regulator for MFS too. It has<br />
partnered with Societe Monetique Tunisie (SMT) for<br />
the provision of switching and clearing services.<br />
In 2011, the BCT issued a circular on MFS, stating<br />
that they may only be used for payments – all<br />
loading needed to be dealt with at a bank branch<br />
or through the use of a prepaid card issued by a<br />
bank. This effectively left the development of MFS<br />
to banks.<br />
b) The Ministry of Communications Technologies<br />
(MCT): is responsible for the organisation<br />
of the telecommunications sector and oversees all<br />
planning, control and supervision of its activities.<br />
In 2013, following a series of talks between the Ministry<br />
of Telecommunications and other stakeholders –<br />
they agreed a change was needed in MFS. The talks<br />
reached a standstill and in 2014, both World Bank<br />
and Consultative Group to Assist the Poor (CGAP)<br />
launched an assessment of the country’s MFS usage<br />
and market potential.<br />
At present the business model practiced is a bank-led<br />
one, with MNO involvement limited to the development<br />
process. AML/CFT and KYC requirements must be<br />
performed at a bank with a photograph ID. However,<br />
there remains a lack of clarity about these elements<br />
(AML/CFT and KYC) and also interoperability.<br />
MOROCCO<br />
Efforts are being made by Moroccan authorities to<br />
modernise its banking systems and increase financial<br />
services access to its population. The country is a<br />
significant financial centre in Africa, particularly for<br />
in¬surance where it is the second largest market<br />
after South Africa. In 2010, the CGAP conducted a<br />
favourable evaluation of the country’s financial<br />
inclusion strategy. Since then, the Bank of Morocco<br />
(BAM) has implemented the Strategic Plan (2013 – <strong>2015</strong>)<br />
to address some of the concerns raised. The country<br />
has a lot to gain from using MFS as it has a high mobile<br />
phone subscription rate per 100 people. This figure<br />
has grown from 30 (2004), to 100 (2011) 1 to over 135 in<br />
the most recent studies (<strong>2015</strong>) 2 .<br />
There are two public entities responsible for the<br />
regulation of MFSs in the country. These are Bank Al-<br />
Maghrib (BAM), which is the Central Bank of Morocco,<br />
along with L’Agence Nationale de Réglementation des<br />
Télécommunications (ANRT) – the Telecommunications<br />
Authority.<br />
a) The Bank Al-Maghrib (BAM): is the prudential<br />
regulator and supervisor of financial institutions.<br />
Its responsibilities include monitoring and ensuring<br />
security payments systems and related standards<br />
are maintained. It also acts as the government<br />
advisor on aspects relating to the banking and<br />
financial sector. In 2014, BAM was given assistance 3<br />
by the European Investment Bank to promote<br />
financial inclusion in the country.<br />
Some of the difficulties which had already been<br />
aired included the requirement for all MNOs<br />
and their respective agents be registered as<br />
public limited or limited companies 4 . However,<br />
amendments made to Loi N° 30-03 Relative aux<br />
Etablissements de Credit et Organisme Assimiles<br />
(2013) have not only put forward clearer definitions<br />
24
of MFS and other concepts, but also created a<br />
Payment Service Provider category to lead MFSs.<br />
b) L’Agence Nationale de Réglementation des<br />
Télécommunications (ANRT): is responsible<br />
for the supervision of the postal service (La Poste)<br />
and the telecommunications sector. Its duties<br />
include the promotion and maintenance of a fair<br />
and competitive market.<br />
Under the Payment Service Providers category, which<br />
is determined by the BAM, firms are able to transfer<br />
funds and execute payment transactions. AML/<br />
CFT and KYC requirements include the individual’s<br />
national ID and address. These requirements are<br />
for both the sender and recipient. There was no<br />
indication during the research for this report that<br />
interoperability is mandatory.<br />
EGYPT<br />
In 2010, the Central Bank of Egypt (CBE) approved the<br />
use of MFSs for banks. It was a prudent move toward<br />
greater financial inclusion. Egypt has an economy<br />
heavily dependent on cash with an estimated 94<br />
percent of transactions being cash-based 5 . The<br />
reasons for this are both cultural – such as the notion<br />
of social money pooling, Gam’eya; and sociological as<br />
there remains a general lack of trust in the financial<br />
services and banking sector.<br />
This has resulted in a low banked rate of just 36<br />
percent (as recently as 2011) when both formal and<br />
informal financial players are considered 6 . There<br />
are two main bodies responsible for the regulations<br />
regarding Egypt’s MFS. These are the CBE and the<br />
National Telecom Regulatory Authority (NTRA).<br />
a) The Central Bank of Egypt (CBE): is responsible<br />
for supervising the financial activities, the banking<br />
business and for overseeing any new financial<br />
services coming onto the market. The CBE (in close<br />
collaboration with the Ministry of Finance) has<br />
delegated part of its responsibility to the Egyptian<br />
Banks Company (EBC). These mainly concern the<br />
oversight of the Debit Card Scheme and Shared Cash<br />
Network, The Automated Clearing House, and The<br />
Mobile Payment Network. EBC is also working closely<br />
with MasterCard to bring MFS to all people in Egypt.<br />
b) The National Telecommunications Regulatory<br />
Authority (NTRA): ensures the total<br />
coverage of the mobile services network. It also<br />
monitors the technical and economic efficiency of<br />
MNOs in the country. The body benefits from close<br />
collaborations with the CBN and was consulted<br />
when MNOs were being given the opportunity to<br />
provide MFS. The NTRA has also been pressuring<br />
the CBN to make some amendments to MFS<br />
regulations. They have lobbied for the increase<br />
in the daily limits placed on MFS transactions and<br />
for the CBN to explore how the service might best<br />
facilitate international remittances.<br />
The 2010 regulations released by the CBE only<br />
allow banks to deliver MFS. This is subject to being<br />
licensed by the CBE itself. Non-banks must partner<br />
with banks, though ultimate responsibility for the<br />
service rests with the bank. As part of AML/CFT and<br />
KYC requirements, service providers are required<br />
to obtain and send a copy of the account holder’s<br />
identification document onto the partnering bank,<br />
if conducted by a service provider. The regulations<br />
also include maximum limits on users’ account<br />
balances, and their daily and monthly withdrawal<br />
volumes too.<br />
Eastern Africa<br />
KENYA<br />
Following months of engagement between Safaricom<br />
and the Central Bank of Kenya (CBK), it was agreed<br />
that M-Pesa could be brought onto the market in<br />
March 2007. Within less than two years the service<br />
had amassed 4.5 million active customers. It was its<br />
astronomical rise and pressures from the Kenyan<br />
Bankers Association, which resulted in the service<br />
being called into question by the Ministry of Finance<br />
in late 2008. In a controversial statement, the Ministry<br />
expressed doubt that M-Pesa “will end up well” 7 . It<br />
instructed the CBK to conduct a risk assessment into<br />
M-Pesa’s services and to determine its place within<br />
Kenya’s legislative framework.<br />
CBK was satisfied with M-Pesa’s security and risk<br />
procedures – which were benchmarked against<br />
global standards on the prevention of money<br />
laundering. CBK’s legal team also settled the Banks’<br />
main dispute, namely that the operation was not a<br />
banking business as defined by the Banking Act. The<br />
risk assessment was published in Kenya’s Gazette<br />
in early 2009. The following year, the CBK issued the<br />
25
Guidelines on Agent Banking, which outlined that nonbanks<br />
could act as MFS agents. Regulation of the MFS<br />
market is governed by two bodies: The CBK, and the<br />
Communications Commission of Kenya (CCK).<br />
a) The Central Bank of Kenya: Submitted a<br />
National Payments System Bill in 2011, though passed<br />
in the same year, its notice of commencement<br />
was only recently announced in 2014. For the most<br />
part the legislation has codified into banking laws<br />
what already existed within the MFS market. It has<br />
legitimised the existing business models of MFS<br />
and “letters of no objection” given by the CBK for<br />
new MFS businesses; as well as provided clarity for<br />
those new entrants to the market.<br />
The notable features of the new Bill are its increased<br />
focus on ring-fencing and the safeguarding of<br />
funds; and general risk management practices of<br />
MFS firms. The former includes limits on how much<br />
and where money, saved into banks for e-money<br />
purposes, is stored. The second principle relates<br />
to consumer protection. It requires providers<br />
have disclosure mechanisms and open channels<br />
for consumer complaints. It has also incorporated<br />
a fine for MFS providers that fail to comply with<br />
disclosure requirements.<br />
b) The Communications Commission of Kenya<br />
(CCK): regulates Kenya’s telecommunications<br />
services. It is responsible for granting the licenses<br />
to entities to offer mobile telecommunication<br />
services.<br />
The National Payment System Regulations (2014)<br />
validate the AML/CFT and KYC practices which had<br />
existed in the market. This includes the obligation<br />
to verify customers’ identities through official<br />
documents such as birth certificates and driving<br />
licences. The new regulations also do not mandate<br />
interoperability. Instead they encourage market-led<br />
interoperability through the CBK’s recognition of a<br />
Payment Service Provider Management Body (PSPM).<br />
It is yet to be seen whether this will be enough to<br />
address the World Bank’s earlier concerns regarding<br />
M-Pesa’s dominance of the market due to this lack of<br />
interoperability.<br />
UGANDA<br />
When the Bank of Uganda (BOU) was first approached<br />
by the mobile network operators (MNO) to offer MFS it<br />
permitted them to go ahead on two conditions. Firstly,<br />
they must partner with a licensed financial institution.<br />
Secondly, they must apply to the BOU for a “letter of<br />
no objection” which will be granted based on the legal<br />
agreement made between the MNO and licensed<br />
financial institution. Following this, in 2013 the BOU<br />
issued the Mobile Money Guidelines to provide clarity<br />
on the industry about the rules to follow.<br />
It is common practice in Uganda for collaborating<br />
regulatory bodies to enter into Memorandums of<br />
Understanding (MOUs). This year (<strong>2015</strong>) both the<br />
BOU and UCC agreed on the terms of their MOU<br />
and established the Joint Working Group for Mobile<br />
Financial Services (JWG-MFS). Their MOU is said to<br />
formalise the relationship between both bodies<br />
concerning the “approval, regulation and supervision<br />
of mobile money services (MFS)” in Uganda 8 .<br />
There are two main bodies governing MFSs in Uganda:<br />
the BOU and the UCC.<br />
a) The Central Bank of Uganda (BOU): under<br />
the Financial Institutions Act (2004) regulates all<br />
licensed financial institutions. If the MFS operator<br />
is not a licensed financial institution, then they must<br />
partner with a licensed institute in order to offer<br />
MFSs. It is the responsibility of the licensed financial<br />
institute to carry out due diligence on the MNO.<br />
They must obtain proof and review the latter’s –<br />
financial position, business plan, risk management<br />
proposal and technology system, and adherence<br />
to AML/ CFT measures.<br />
The BOU has issued MFS guidelines which stipulate<br />
the approval process of MFSs, information to be<br />
displayed at agent stands such as the agent’s<br />
identity number and dedicated phone numbers<br />
for the MNO 9 involved. However, though BOU<br />
supervises the MFSs, it is the responsibility of the<br />
MNO to supervise its own agent network.<br />
b) The Uganda Communication Commission<br />
(UCC): authorises MNOs to offer MFS as a valueadded<br />
service. It is also responsible for ensuring<br />
network availability (network system uptime)<br />
thereby allowing the service to run, and the<br />
mechanisms for ensuring fair market competition.<br />
At present MFS are mandated to use systems which<br />
are interoperable with other payment systems in<br />
the country and even internationally. The regulation<br />
also state AML/CFT and KYC which include customer<br />
identification through any one of the following: a<br />
valid passport, driving permit, voter’s card, financial<br />
card, identity card among other items. The guidelines<br />
also state that limits will be placed on the frequency,<br />
volume and value of transactions; these limits and<br />
any revisions thereof must be sent to the BOU for its<br />
approval before their commencement.<br />
26
RWANDA<br />
By 2006, The National Bank of Rwanda (NBR) had already<br />
begun, aided by both the Monetary and Capital<br />
Markets Department (MCM) and East AFRITAC (AFE), a<br />
modernisation of its financial systems, predominantly<br />
relating to its monetary policy and operations. This<br />
had been the result of a Financial Sector Assessment<br />
Programme (FSAP). At the same time, the NBR sought to<br />
modernise its national payment systems.<br />
Critical to the process was the increased efficiency<br />
of low-value payments, the automation of high value<br />
government payments and the introduction of Real<br />
Time Gross Settlement (RTGS) among other aspects.<br />
Following the completion of these tasks, the NBR<br />
requested the support of the AFE in drafting the<br />
proposal to be put to the Rwandan Parliament. In it,<br />
the NBR outlined its aim to become a regional ‘financial<br />
hub’ and to broaden access to financial services.<br />
Rwanda was introduced to MFS in 2010, later than its<br />
neighbouring countries. Two years later, it released<br />
the regulations governing MFS. There are three main<br />
regulatory bodies charged with providing guidance to<br />
the MFS – banks, mobile network operators, insurers and<br />
agencies. These are: The National Bank of Rwanda 10 –<br />
Central Bank (NBR), the National Payment Council (NPC),<br />
and Rwanda Utilities Regulations Agency (RURA).<br />
a) The National Bank of Rwanda (NBR):<br />
oversees all aspects concerned with the payment<br />
system including the licensing of banks and nonbank<br />
providers. The main legislation governing<br />
MFS is Regulation Governing Payment Provider<br />
Services (2012). In it the NBR sets out the definitions<br />
of ‘branchless banking’, provides the scope of<br />
‘payment services’, process and requirements<br />
for licences (for supervised institutions 11 ), agency<br />
agreements, interoperability 12 , and consumer due<br />
diligence and KYC principles.<br />
I. National Payment System Council: is governed<br />
by the NBR and is tasked with developing a policy<br />
and guidelines for payment systems in Rwanda. It<br />
is made up of representatives from various bodies<br />
including microfinance, telecommunication firms,<br />
government officials and the governor of the NBR.<br />
b) Rwanda Utilities Regulations Agency<br />
(RURA): is tasked with regulating certain public<br />
utilities among which include “telecommunications<br />
network and/ or telecommunications services”.<br />
Its three main aims are to: ensure fair market<br />
competition, improve access through affordability<br />
and availability, and protect consumer rights and<br />
interests. Before a supervised institution can be<br />
licensed by the NBR, it must first be certified by the<br />
RURA as a Payment Service Provider 13 operating in<br />
its network.<br />
Rwanda’s legislation allows non-bank such as MNOs to<br />
lead MFS operations, but they must obtain a license<br />
to conduct the service. Supervised institutions (i.e.<br />
banks, non-bank financial institutions or microfinance<br />
institutions already supervised by the Central Bank)<br />
are exempt from this license requirement. Within the<br />
AML/CFT regulations, clients are required to provide<br />
photographic identification before they are allowed to<br />
open an account through an Agent.<br />
TANZANIA<br />
As part of its “test and learn” approach the Bank<br />
of Tanzania (BOT), though it kept a close watch on<br />
the development of MFS, waited to understand the<br />
growing market before choosing how best to regulate<br />
it. Concurrently, the BOT visited the Philippines in early<br />
2012 to gain an insight into how the country had been<br />
governing its MFS sector. Following this visit, and<br />
discussions with the Alliance for Financial Inclusion’s<br />
(AFI) Mobile Financial Services Working Group which<br />
included other MFS stakeholders, BOT released the<br />
first draft of its Mobile Payments Regulations in April.<br />
In May 2012, an updated draft was released which<br />
introduced the licensing regime for non-banks offering<br />
MFS. It requires MNOs (and any non-banks) to obtain a<br />
license as wholly-owned subsidiaries. The regulations<br />
also maintained the arrangement requiring MNOs hold<br />
trust accounts with commercial banks at 100 percent<br />
cover. The BOT decided on a licensing arrangement<br />
in conjunction with the body responsible for regulating<br />
the telecommunications industry – Tanzania<br />
Communication and Regulatory Authority (TCRA).<br />
Together the BOT and TCRA regulate the quality of the<br />
service received by consumers and ensure financial<br />
prudence by MNOs and financial institutions.<br />
a) The Bank of Tanzania (BOT): was given<br />
powers via the Bank of Tanzania Regulations to<br />
administer and regulate non-bank entities in<br />
offering payment services. BOT is empowered<br />
to regulate, monitor and supervise the payment,<br />
clearing and settlement system; as well as<br />
conduct full oversight of any bank and financial<br />
institution or infrastructure service provider<br />
within Tanzania.<br />
However, its powers are limited to banks and other<br />
financial institutions, largely ignoring the role of<br />
MNOs. Currently, MNOs need to obtain “letters of<br />
no objection” from the BOT and a pre-requisite<br />
for this is a partnership with a regulated financial<br />
body. This guarantees that consumer funds are<br />
protected in the banking system and are backed<br />
with a 100 percent liquidity prerequisite.<br />
27
) Tanzania Communication and Regulatory<br />
Authority (TCRA): was established under<br />
both the Tanzania Communication and Regulatory<br />
Authority Act (2003), and the Electronic and Postal<br />
Communications (Licensing) Regulations (2011). It<br />
ensures MNOs perform to the required standard<br />
whenever any financial transactions are carried<br />
out through their services.<br />
The BOT and TCRA have a good working relationship<br />
which has been formalised through a Memorandum<br />
of Understanding (MOU).<br />
AML/CFT and KYC are conducted on a tiered basis with<br />
the minimum requirement of identity documentation<br />
including such items as voter registration cards,<br />
passports, or employee cards. The tier level<br />
determines the size and daily transfer limits as well<br />
as the maximum account balance permissible for<br />
customers. A key aspect of the updated regulations<br />
is interoperability. The regulations are in line with the<br />
BOT’s National Financial Inclusion Framework released<br />
in 2013, which aims to “build on the country’s recent<br />
successful experience with mobile money services...<br />
to increase Financial Inclusion” in the country 14 .<br />
Southern Africa<br />
ZIMBABWE<br />
There are two primary bodies responsible for<br />
regulating the MFS sector in Zimbabwe. These are<br />
the Reserve Bank of Zimbabwe (RBZ) and Postal<br />
and Telecommunication Regulatory Authority of<br />
Zimbabwe (POTRAZ). Initially, POTRAZ had complete<br />
oversight of the MNOs, but with the emergence of<br />
MFS, this responsibility is now shared with the RBZ.<br />
With no unique legislation or guidance around MFS<br />
and its activities this has reportedly caused regular<br />
clashes between the regulatory bodies.<br />
The main legislative piece used by the RBZ is the<br />
National Payment Systems Act (2001) which does<br />
not mention MFS or its components. Only financial<br />
institutions are governed by the act, so MNOs must<br />
partner with financial institutions covered in the Act to<br />
offer MFS.<br />
a) The Reserve Bank of Zimbabwe (RBZ): has<br />
primary responsibility and oversight and is guiding<br />
the retail payment services in Zimbabwe. These are<br />
performed over two separate departments: the<br />
National Payment Service Department (NPSD) and<br />
the Banking Licensing Supervision and Surveillance<br />
Division (BLSSD).<br />
I. National Payment Service Department (NPSD)<br />
– proactively seeks to encourage innovative<br />
solutions for the payments service modernisation<br />
ecosystem in such areas as MFS and in increasing<br />
the use of low value payment systems.<br />
II. Banking Licensing Supervision and Surveillance<br />
Division (BLSSD) – has more of a supportive role,<br />
assisting the NPSD in the application and approval<br />
of financial institutions intending to introduce new<br />
MFS products.<br />
The RBZ has a set of internally developed<br />
operational guidelines and frameworks to regulate<br />
MFS. These guidelines are supposedly based on the<br />
Bank of International Settlements and the Bankable<br />
Frontiers Association. With little transparency<br />
concerning these guidelines, their enforcement is<br />
subject to interpretation. Nevertheless, all financial<br />
institutions must apply for ‘permission’ to offer<br />
MFSs. Both financial institutions and MNOs offering<br />
MFS must send weekly reports to the RBZ about the<br />
volume and values of their transactions.<br />
b) Postal and Telecommunication Regulatory<br />
Authority of Zimbabwe (POTRAZ): allows<br />
MNOs to offer MFS, which it regards as ‘valueadded<br />
services’. Its primary concern relates to how<br />
their services are administered and the services’<br />
robustness.<br />
The absence of any specific act, guideline or<br />
regulation concerning MFS means the RBZ (through<br />
the NPSD) communicates to the sector using monetary<br />
policy statements. This absence also means the RBZ<br />
cannot enforce MNOs or financial institutions to<br />
comply on these matters; instead it relies on moral<br />
suasion. All MNOs and financial institutions have<br />
been persuaded to use the ZIMSWITCH gateway to<br />
offer MFS – part of the Zimswitch Instant Payment<br />
Interchange Technology (ZIPIT) system – thus<br />
ensuring interoperability in the industry.<br />
This lack of legislation has meant there are no clear<br />
guidelines on aspects relating to AML/CFT and KYC<br />
within Zimbabwe’s MFS sector. Neither is there a<br />
mandate on MFS systems being interoperable.<br />
28
SOUTH AFRICA<br />
As the first country in Africa to be introduced to MFSs,<br />
the South African Reserve Bank (SARB) made its stance<br />
known on the product in 2006 with its Position Paper on<br />
Electronic Money. This was more recently followed up<br />
in the Position Paper on Electronic Money (2009) and<br />
Position Paper on Interoperability (2011).<br />
In the former position paper, SARB outlines that the<br />
transference if “not normally due to the beneficiary<br />
in terms of an obligation” is classified as “deposittaking”<br />
under the Bank Act, No. 94 of 1990. As ‘deposittaking’<br />
is defined in the Banks Act No. 94 of 1990 as the<br />
“business of a bank”, only banks may undertake MFS.<br />
A recent legislation, the Financial Sector Regulation<br />
Bill (currently in its second draft – October <strong>2015</strong>), is<br />
said to represent a huge restructure to the country’s<br />
financial regulations, has reaffirmed SARB’s position<br />
on MFS. Though the Bill does not make any explicit<br />
reference to MFS, it does state that acceptance of<br />
deposits are defined as financial products regulated<br />
by the prudential and conduct authorities.<br />
There are two governing bodies within the country<br />
tasked with regulating the provision of MFS. These are<br />
SARB and the Independent Communications Authority<br />
of South Africa (ICASA).<br />
a) The South African Reserve Bank (SARB):<br />
oversees and supervises the National Payment<br />
System. SARB is also responsible for regulating the<br />
payment, clearing and settlement systems, powers<br />
given to it via the National Payment System and<br />
South African Reserve Bank Acts. It is possible for<br />
a non-bank to enter into an agreement with a bank<br />
to offer these MFSs. Before a bank partners with an<br />
MNO, to offer any MFSs, it must inform the SARB.<br />
b) The Independent Communications Authority<br />
of South Africa (ICASA): provides regulation<br />
of the telecommunications services, such as mobile<br />
phones. It is given its authority under the Electronic<br />
Communications Act 36 of 2005.<br />
Under Guidance Note 6 (released in 2008), banks<br />
are allowed to open low level MFS accounts without<br />
having to undertake face-to-face KYC procedures i.e.<br />
without any documentary evidence. However, most<br />
banking institutions have still chosen to take a more<br />
prudent approach. This has been in an attempt to<br />
avoid AML/CFT violations and the personal penalties<br />
which could be levied against bank compliance<br />
officers. This, together with the relatively low daily<br />
transaction limits on these forms of accounts has<br />
made MFS less attractive for South Africans.<br />
Neither the Position paper on Interoperability or<br />
Electric Money mandates interoperability within MFS.<br />
This omission was intentional with the hope that it will<br />
encourage innovation within the sector. However, the<br />
papers are clear about emphasising this position of<br />
interoperability as the most preferred option.<br />
Western Africa<br />
NIGERIA<br />
The Central Bank of Nigeria Act (2007) included<br />
provisions for the Central Bank of Nigeria promoting<br />
best practice and financial inclusion. At the same time<br />
the Financial System Strategy 2020 was erected to ensure<br />
competitiveness in the country’s economy. Since then<br />
the CBN has been very forthcoming in the development<br />
of guidelines to manage the growing use of MFS. These<br />
have included: The Regulatory Framework for Mobile<br />
Payment Services in Nigeria (2009), and the Regulatory<br />
Framework for Licensing Super Agents.<br />
a) The Central Bank of Nigeria (CBN): holds the<br />
primary oversight for MFS providers through the<br />
Central Bank of Nigeria Payments Division. This is<br />
legislated through the National Payment Systems<br />
Management Bill and the guidance given in the Mobile<br />
Money Regulatory Framework. The NPS Management<br />
Bill provides management, administration and<br />
supervision of payments, and the clearing and<br />
settlement systems.<br />
While the Regulatory Framework for Mobile Payment<br />
deals with creating an enabling environment for<br />
mobile payment services, and in specifying the<br />
minimum technical and business requirements<br />
needed for MFSs. It also defines the three major<br />
models for the implementation of MFS:<br />
I) Bank-Focused Model: where banks provide MFS<br />
using the mobile phone as the delivery channel.<br />
This model may only be used by licensed financial<br />
institutions.<br />
II) Bank-Led Model: where a bank or consortium<br />
of banks in partnership with other organisations<br />
jointly provide MFSs by leveraging on a mobile<br />
banking system.<br />
III) Non-bank Led Model: allows non-banks, who<br />
have registered with the CBN as Payment Service<br />
Providers, to deliver MFSs. The model is applicable<br />
for any organisation except, licensed deposit<br />
29
money banks and telecommunication companies –<br />
MNOs – that intend to offer MFSs.<br />
b) The Nigerian Communication Commission<br />
(NCC): is responsible for the telecommunications<br />
sector required to support MFS. Telecommunication<br />
firms are excluded from the non-bank led<br />
model, until “regulatory issues between the<br />
NCC and CBN are regulated”. It is also to ensure<br />
telecommunication firms are “not given [an] undue<br />
advantage” because of their wide coverage 15 .<br />
These most recent guidelines fail to mention any<br />
updates on AML/CTF. Instead they refer to the CBN’s<br />
AML/CFT Regulations (2009). However, in 2012, the CBN<br />
released the Proposed Three-Tiered KYC Requirement<br />
Approach. The document outlined maximum deposit<br />
and cumulative balance amounts, together with the<br />
customer ID requirements for each of the three<br />
stages. The minimum KYC requirements at all levels<br />
includes a name, date of birth, gender and address.<br />
The guidelines require that all MFS providers ensure<br />
interoperability and interconnectivity.<br />
GHANA<br />
The Bank of Ghana (BOG) released Guidelines for<br />
Branchless Banking in 2008. It was a set of guidelines<br />
delivered with the foresight of MFS being a major<br />
force within the country. At this point MFS was still<br />
only gaining traction via WIZZIT in South Africa, and<br />
M-Pesa in Kenya. The only provider of MFS in Ghana at<br />
the time, MTN Mobile Money, had only gained 200,000<br />
of its potential 8 million subscribers.<br />
The guidelines stipulated that MFSs were to be<br />
undertaken only by licensed deposit-taking financial<br />
institutes and their agents (such as Telecommunication<br />
firms, fuel distributor firms and retail outlets). As a<br />
means of facilitating interoperability, it also insisted<br />
on a many-to-many arrangement between banks and<br />
their agents. This meant MNOs had to collaboratively<br />
propose MFSs with at least three banks. However,<br />
in July <strong>2015</strong>, the BOG replaced this document with<br />
the Guidelines for E-Money Issues in Ghana, it also<br />
released Agency Guidelines too.<br />
a) The Bank of Ghana’s (BOG): original<br />
Branchless Banking guidelines created complexity<br />
and essentially blocked any direct communication<br />
between MNOs and the BOG. As many banks were<br />
also uninterested in banking the unbanked –<br />
content with their existing client base – they failed<br />
to properly invest in the scheme. The many-tomany<br />
arrangement also left banks fearful of the<br />
“free rider” problem from other banks involved in<br />
the scheme. It left MNOs in a precarious position,<br />
conducting these activities knowing they were<br />
breaking the law, and also attracting customers<br />
who ultimately belonged to the banks.<br />
These issues were highlighted to the BOG by<br />
Consultative Group to Assist the Poor (CGAP),<br />
who demonstrated how the Branchless Banking<br />
guidelines had inadvertently caused Ghana to<br />
lag behind its competitors in MFS and financial<br />
inclusion. These new guidelines removed all these<br />
constraints: the many-to-many scheme, forced<br />
banking and MNO partnerships, and indirect<br />
communication with MNOs. It also required that<br />
at least 80 percent of interest made from MFS<br />
deposits be passed onto customers, and that<br />
non-banks had to participate fully through whollyowned<br />
subsidiaries – Dedicated Electronic Money<br />
Issuers (DEMI).<br />
The Guidelines for E-Money Issuers in Ghana<br />
is intended to increase financial inclusion, and<br />
safeguard and mitigate against risks associated with<br />
MFS. They have avoided mandating interoperability in<br />
the aim of this aspect becoming a market-led process.<br />
It also adopts a three level risk-based approach<br />
to KYC each with maximum balance and daily and<br />
monthly transaction limits. The type of identification<br />
documents varies depending on the level of account<br />
opened. All three accounts require that the customer<br />
provide their name, date of birth, residential<br />
address, telephone number and an acceptable form<br />
of identification document.<br />
30
Enabling Environment – Mapping the legislative landscape.<br />
Enabling Environment<br />
Country<br />
Year<br />
MFS<br />
Introduced<br />
Mobile Money<br />
Penetration<br />
(<strong>2015</strong>)<br />
Business Model:<br />
Bank- led, Nonbank<br />
or Payment<br />
Provider Service<br />
Regulations<br />
AML/CFL&<br />
KY<br />
Interoperability<br />
(Mandated - M.)<br />
Overall<br />
Evaluation of<br />
Enablin<br />
Environment<br />
Tunisia 2010 0.6 Bank-led<br />
Difficult/<br />
Unclear<br />
Legislation<br />
is unclear<br />
Difficult<br />
Morocco 2010 - Non-bank led Difficult - Difficult<br />
Egypt 2013 1.1 Bank-led Medium M. Medium<br />
Kenya 2007 58.4 Both Simple Not M. Easy<br />
Uganda 2009 35.1 Both Simple M. Easy<br />
Rwanda 2010 18.1 Both Simple M. Easy<br />
Tanzania 2008 32.4 Both Simple M. Easy<br />
Zimbabwe 2011 21.6 (No regulation) Uncertain Not M. Difficult<br />
South Africa 2004 14.4 Bank-led Medium Not M. Medium<br />
Nigeria 2011 2.3<br />
Both – non-bank<br />
led excl. MNOs;<br />
and PPS<br />
Medium M. Difficult<br />
Ghana 2009 13<br />
Both – wholly<br />
separate entity<br />
Medium Not M. Medium<br />
31
Southern and Eastern Africa<br />
MOBILE<br />
FINANCIAL<br />
SERVICES<br />
COLLABORATIONS<br />
The growth of MFSs in Africa has<br />
predominately been led by MNOs; however,<br />
many governments have defined them<br />
as ‘financial products’ thereby requiring<br />
financial oversight. This has led to a dual<br />
regulatory system between Central Banks<br />
and Telecommunications departments.<br />
This, together with the intense competition,<br />
has forced firms to enter into partnerships<br />
to provide more innovative products and<br />
services. Below is a review of some of the<br />
major collaborations occurring across<br />
the continent beginning firstly within the<br />
Southern and Eastern regions, and then in<br />
Northern and Western Africa.<br />
Dominant payments player faces challenge<br />
M-Pesa is the most high-profile and successful<br />
FinTech firm in Africa. It is owned by Safaricom, a firm<br />
which Vodafone owns a 40 percent stake. Since its<br />
launch M-Pesa has entrenched itself in the financial<br />
services system through banking collaborations<br />
thereby further expanding its offerings. Its latest<br />
collaborations with Kenya Commercial Bank and<br />
Commercial Bank of Africa separately, have resulted<br />
in M-Shwari and M-Pawa both loan services. Each<br />
product has been of huge commercial success.<br />
M-Shwari has over 10 million customers in Kenya, while<br />
M-Pawa has 1.8 million customers in Tanzania.<br />
That success has attracted a new competitor in the<br />
biggest bank in Eastern Africa by deposits – Kenya’s<br />
Equity Bank. It has a network of 200 branches across<br />
Kenya, Uganda, Rwanda, Tanzania, and South Sudan.<br />
Having previously launched a service with Safaricom<br />
which failed, it has now sought to gain full control<br />
of the process by diversifying and becoming a<br />
mobile virtual network operator (MVNO) through its<br />
subsidiary, Equitel.<br />
The firm has leased over 60 percent of another MNO’s<br />
(Airtel) network infrastructure. It plans to roll out its<br />
MVNO to Uganda, Tanzania and Rwanda through this<br />
deal with Airtel. Its latest service facilitates mobile<br />
banking through the use of a film-like label which<br />
is stuck onto the customer’s existing SIM card. The<br />
service attracted 1 million subscribers during its<br />
initial 1 . It has had a cumulative monthly growth rate in<br />
SIM uptake of 93 percent in its first year 2 .<br />
Equitel’s Profile:<br />
Mobile Virtual Network Operator<br />
Orange Money has<br />
loaned 60 % of Airtel’s<br />
network infrastructure<br />
telecommunications.<br />
2.2% OF THE MARKET<br />
Equitel has so far gained a market share of 2.2<br />
percent at the expense of Orange Money and Airtel,<br />
the local arm of India’s Bharti Airtel. Safaricom has<br />
mounted a strong campaign to limit Equitel’s growth,<br />
and in August <strong>2015</strong>, increased transfer tariffs for<br />
third-party users 3 . It has also argued that Equitel’s<br />
thin SIM technology presents security risks; however,<br />
these claims have since been dismissed by courts.<br />
32
Orange Moves East<br />
As well as facing Equitel’s growth, Safaricom is also<br />
dealing with a fresh challenge from Orange, through<br />
its Orange Money service, particularly within the<br />
realm of international remittances. Its counter-attack<br />
is a partnership with MTN Mobile Money allowing<br />
international remittances between their services.<br />
The deal permits M-Pesa customers (based in<br />
Kenya, Tanzania, Democratic Republic of Congo and<br />
Mozambique) and MTN Mobile Money customers<br />
(based in Uganda, Rwanda and Zambia) to more easily<br />
transfer money between each other. Orange Money<br />
has in turn moved into Botswana, partnering with Visa<br />
Card, to enable Orange Money account holders to<br />
use approved point-of-service (POS) terminals and<br />
e-commerce websites.<br />
Tackling the smaller markets<br />
M-Pesa delayed its launch into Lesotho by a few<br />
months to learn from its distribution channels in<br />
Tanzania. It was preceded to Lesotho by First National<br />
Bank (through its FNB eWallet) and Econet Telecom<br />
Lesotho – ETL, through its Ecocash offering. Econet<br />
has since developed a funeral cover service with<br />
Alliance Insurance; a deal the insurance firm has<br />
also entered with Safaricom allowing the payment of<br />
insurance premiums via the M-Pesa platform 4 .<br />
Though often overlooked because of the larger<br />
countries which surround it, the Swazi government is<br />
trialling the use of Swazi MTN’s services to distribute<br />
welfare funds. However, one major concern stopping<br />
the deal from progressing is the low coverage available<br />
on its national borders with South Africa. Swazi MTN is<br />
also working with Ericsson on the deployment of the<br />
Ericsson Converged Wallet to enhance the stability and<br />
security of Swazi MTN’s MFS offerings.<br />
Northern and Western Africa<br />
Orange Money enters the lexicon<br />
Orange SA is one of the primary players in Northern<br />
and Western Africa through its Orange Money, MFS.<br />
It debuted the product in Ivory Coast in 2008 and<br />
grew to more than 100,000 subscribers in a year. It is<br />
now so pervasive that the French phrase “faire un<br />
Orange Money” (“Do an Orange Money”) is part of<br />
local vernacular.<br />
Since then, it has expanded into 13 African countries<br />
and has over 13 million subscribers. Roughly 30 million<br />
EUR ($32 million) are exchanged via Orange Money.<br />
The service is primarily in Western and Northern<br />
African countries. Through its part ownership of<br />
Mobinil in Egypt it has partnered with BNP Paribas and<br />
Emriates NBD to offer MobiCash. While in Tunisia, the<br />
service is provided in conjunction with Tunisian Post<br />
as MobiMoney.<br />
of mobile financial services. The interoperability<br />
between the two firms builds on Orange Money’s<br />
success in the remittance market in Western<br />
Africa. Launched only in August 2013, it has already<br />
garnered 20 percent of all remittances between<br />
Ivory Coast, Mali and Senegal 5 . Western Union and<br />
MTN are collaborating to gain a strong foothold in<br />
this lucrative remittances corridor.<br />
Remittance Corridor:<br />
Ivory Coast-Mali-Senegal<br />
(Orange Money’s Market Share)<br />
Mali<br />
Orange’s expansion<br />
Orange is seeking more bank partnerships to<br />
expand distribution including one with the Bank of<br />
Africa Group, following a successful partnership in<br />
Madagascar. Orange was also reported to be in talks<br />
to buy four of Airtel’s African businesses in an attempt<br />
to accelerate its expansion. The firm is also discussing<br />
the possible acquisition of Airtel units in Burkina Faso,<br />
Chad, Republic of Congo and Sierra Leone.<br />
“The international transfer service reserved<br />
exclusively for Orange customers is now available t<br />
o Burkina Faso’s Airtel Money customers, and viceversa.,”<br />
announced Thierry Millet, Orange’s head<br />
Senegal<br />
Cote<br />
D’Ivoire<br />
200m<br />
2013<br />
The deal mirrors a similar collaboration which had<br />
existed between MTN Ivory Coast and Airtel Bharti<br />
Bukina Faso allowing interoperability between<br />
their respective clients. Orange also announced in<br />
September <strong>2015</strong> Africa’s first mobile crowdfunding<br />
33
platform, called Orange Collecte, in partnership with<br />
French charity-giving site HelloAsso.<br />
Tangled web of Technology partnerships<br />
There are four main technology partners used within<br />
the field of m-money. They are Mahindra Comviva,<br />
Tagiattitude, Pyro Mobile Money, and Verifone. These<br />
firms collectively account for 40 percent of the<br />
MFS partnership deals conducted in Northern and<br />
Western Africa.<br />
Originally launched as Bharti Telesoft in 1999,<br />
Mahindra Comviva 6 was a subsidiary of the Bharti<br />
Group, before Tech Mahindra acquired a controlling<br />
stake (51 percent) of the company in 2012. In April 2010,<br />
it worked with Maroc Telecom in Morocco to deliver<br />
MobiCash through its award winning mobiquity<br />
system. It deployed the same mobiquity financial<br />
solution in 2013, in its partnership with Gabon Telcoms<br />
(an affiliate of Marco Telecom).<br />
In contrast to Manhindra Comviva’s interconnected<br />
partnerships, Tagiattitude has worked predominately<br />
with smaller or less geographically spread firms. Many<br />
of its collaborations with: Afrimarket, Celpaid Cote<br />
d’Ivoire, Qash Mobile Banking, and Flooz, are not<br />
under the same corporate umbrella or connected by<br />
history, but from both major MNOs and independent<br />
payment service firms.<br />
Verifone Mobile Money is another large powerful<br />
technology provider similar to Manhindra Comviva,<br />
Verfione Terminals in Morocco<br />
80% of the 26,000 terminals<br />
and has fostered working partnerships with the MTN<br />
Group across its 16 countries of operation, enabling<br />
customer use of MTN Mobile Money, and retail use<br />
of its payment terminal solutions. More recently, it<br />
has jointly worked with Bharti Airtel in Ghana bringing<br />
contactless payment services to the latter’s 1.5 million<br />
customers. Its coverage in both Nigeria and Morocco<br />
is hugely impressive. In the former, Verifone claims<br />
to work with all 12 major banks, whilst in the latter<br />
provides 80 percent of the 26,000 terminals in use.<br />
Government initiatives and schemes<br />
More significantly is Verifone’s partnerships with<br />
national bodies. In May 2008, the firm came to an<br />
agreement with leading transaction switching and<br />
payment firms, Ferlo and Byte Tech from Senegal.<br />
The deal resulted in the distribution of Veriofone’s<br />
payment solutions throughout the Union Economique<br />
et Monetairy Ouest Africane (UEMOA) countries 7<br />
and Cameroon.<br />
Verifone has also worked with the Nigerian<br />
government, first in 2012 and later in 2014. The first<br />
deal was a systems solutions project costing $17.8<br />
million, whilst the second project involved the roll<br />
out of more than 100,000 devices as part of the<br />
government’s cash-lite initiative.<br />
MasterCard has so far worked with both the Nigerian<br />
and Egyptian governments in developing national<br />
identification cards for their respective citizens. In<br />
March <strong>2015</strong>, Egypt elected to work with MasterCard to<br />
create digital (mobile based) IDs linked to the national<br />
ID cards. The digital ID cards are intended to improve<br />
P2G services in the country.<br />
The pace of deals within the continent is fast and is<br />
unlikely to stop as other countries outside of Kenya,<br />
South Africa and Nigeria continue to embrace<br />
MFS. Many of these new products and services are<br />
moving beyond simple m-payments and transfers.<br />
They are branching into international remittances,<br />
investments options, savings products, and other<br />
aspects contributing to financial deepening.<br />
34
Percentage and geographical spread of MFS deals over time.<br />
2004<br />
1<br />
2005<br />
0<br />
2006<br />
0<br />
2007<br />
2<br />
2008<br />
6<br />
2009<br />
13<br />
2010<br />
25<br />
2011<br />
47<br />
2012<br />
36<br />
2013<br />
30<br />
2014<br />
19<br />
<strong>2015</strong><br />
3<br />
0<br />
5 10 15 20 25 30<br />
Central<br />
North East West South<br />
TOTAL<br />
35
PART 3:<br />
DERIVATIVES<br />
AND<br />
DRIVERS<br />
Secondary Effects<br />
of FinTech and<br />
Start-up enablers<br />
SECONDARY<br />
EFFECTS OF<br />
FINTECH<br />
The increased use of mobile technology,<br />
specifically mobile phones has been of huge<br />
benefit to many people. Prior to the existence<br />
of FinTech, the development of MFS and<br />
introduction of M-Pesa, telecommunications<br />
were already significant contributors<br />
to countries’ GDP output. In 2006, tax<br />
contribution from mobile communications<br />
accounted for between 3.5 and 5 percent<br />
of total GDP in Kenya, Rwanda, Tanzania<br />
and Uganda 1 . Since then, these East African<br />
countries have gained from the success<br />
of M-Pesa and the proliferation of MFS.<br />
The latest figures now put total mobile<br />
communications at over 6 percent of Sub-<br />
Saharan Africa’s GDP – the largest of any<br />
comparable region 2 .<br />
The full coverage of how this total has been<br />
derived is best dealt with elsewhere 3 . This<br />
report is intended to focus specifically on<br />
the secondary effects of FinTech, principally<br />
on MFS which is the most developed area<br />
of this sector. However, there are some<br />
intersections between MFS and mHealth,<br />
and MFS and m-Agri(culture). These will be<br />
considered briefly and only in their relation<br />
to FinTech. The focus here is on how this<br />
revolution in the financial services is having<br />
an effect on everything from consumer<br />
saving to inflation and wider financial<br />
deepening.<br />
36
Saving<br />
In itself MFS does not encourage saving or act<br />
as a means of reducing “hot stimulus” i.e. the<br />
discouragement of immediately spending any<br />
received monies 4 . M-Pesa, one type of MFS, has<br />
been known to be used as a ‘rudimental bank<br />
account’ by its users. However, the service alone<br />
is not enough to encourage better saving choices<br />
or create saving habits. Instead, it provides a good<br />
foundation to encourage saving behaviour. By<br />
simply accompanying the service with regular SMS<br />
messages prompting users to save has proven<br />
sufficient enough to encourage this behaviour.<br />
Preliminary findings suggest that it is the regularity<br />
of the messages, rather than the actual saving<br />
mechanism which is the main factor resulting in the<br />
behavioural change.<br />
However there are more innovative products on<br />
offer which have used MFS to encourage saving.<br />
One example is Jipang KuSave (JKS) which utilises<br />
microfinance (specifically microloans) to ensure<br />
saving. The concept works by the customer setting<br />
a savings target over a period of time. They are<br />
then given a series of interest free microloans part<br />
of which they are ‘forced’ to save for their chosen<br />
future date. As the customer repays their loans,<br />
they are eligible for even higher loan amounts –<br />
which are split between immediate use and ‘forced’<br />
savings. Eventually, the customer will have enough<br />
savings to form part of their future loans or<br />
savings target.<br />
This method of saving helps break the cycle of<br />
individuals having to rely on expensive credit<br />
options during times of low/erratic income or<br />
‘shocks’. Though not originally intended as a saving<br />
tool, M-Pesa has certainly allowed its customers<br />
to be more prudent with their spending. Since its<br />
introduction M-Pesa customers have increased<br />
savings for “emergencies” – self-insurance. From<br />
2008 to 2009 there was an increase of 10 percent<br />
(from 12 to 22 percent 5 ). One possible explanation<br />
for this is that customers now have another platform<br />
from which to regularly check their bank balance<br />
and progress towards a saving target.<br />
Jipang KuSave (JKS)- Microloans Scheme<br />
Cycle 1 Cycle 2 Cycle 3 Cycle 4<br />
Forced Savings<br />
Inflation<br />
The fear that m-money transactions will cause an<br />
increase in inflation in African countries has been<br />
proven wrong in various research papers. There is<br />
good reason behind the immediate concern. M-money<br />
transactions have been shown to increase both the<br />
velocity of money and the money multiplier effect:<br />
both concepts traditionally linked with increases in<br />
inflation. However, these transactions appear to<br />
have “loosened the link between these variables and<br />
inflation” 6 . This means inflation will be more difficult to<br />
predict based on these two components 7 .<br />
More encouragingly, recent research has suggested<br />
that this link between the use of m-money transaction<br />
presents no cause for concern over “its potential<br />
inflationary consequences” 8 . Though the study<br />
conducted uses data from Uganda, a country with a<br />
relatively short (five year history) in MFS, it is still highly<br />
significant for monetary policy. The study also stated<br />
that the wide spread acceptance of MFS might “reduce<br />
inflation”. This is due to the quicker transference of<br />
money to locations where it is most needed. Many<br />
African communities studied show great reliance on<br />
informal insurance networks of friends and family<br />
during shocks. MFS facilitates this re-distribution of<br />
wealth in a way which is quicker, safer and cheaper<br />
than traditional money transfer methods.<br />
!<br />
Sharing Risk<br />
The increased use of mobile phones in itself helps<br />
with the spread of information. This is particularly<br />
important during turbulent or unexpected events<br />
when extra financial or social support is required. Many<br />
of the communities studied in Kenya, Tanzania and<br />
Mozambique rely on an informal insurance system.<br />
They seek financial assistance from those within<br />
their wider network rather than through financial<br />
institutions. The spread of MFS increases access to and<br />
quickens the delivery of credit through friends and<br />
family. Further proof of this risk sharing behaviour<br />
has been shown in the timing of domestic remittances 9<br />
which reach their peak during lean seasons.<br />
(Domestic) Remittances<br />
So far most of the research focussing on the effects of<br />
37
emittances using MFS has concentrated on domestic<br />
remittances – those occurring within the country.<br />
Early studies stipulated that MFS could change the<br />
direction, regularity, and amount of remittances .<br />
Recent evidence appears to support these earlier<br />
claims. M-Pesa users appear to generally send and<br />
receive remittances more frequently than non-M-<br />
Pesa users.<br />
However, aggregate amounts of domestic<br />
remittances have not changed. This indicates<br />
that M-Pesa remittances are generally smaller<br />
than remittances sent through postal services or<br />
traditional remittance firms. These traditional firms<br />
are mainly used when sending larger amounts. Even<br />
when higher transaction thresholds are allowed, MFS<br />
users have still been known to prefer traditional<br />
remittance services such as MoneyGram, Western<br />
Union and financial institution branches over MFS 10 .<br />
One possible explanation is that MFS users who are<br />
often younger might have fewer financial and moral<br />
obligations. They are, therefore less likely to send<br />
larger remittances. It might also simply be brand<br />
loyalty amongst the older generation for these wellknown<br />
traditional firms. Another interesting finding –<br />
perhaps supporting these conclusions – is the slight<br />
change in remittance recipients.<br />
M-Pesa users were more likely to send and receive<br />
remittances from friends and their wider-family,<br />
rather than from children to their parents. The<br />
authors have speculated that this could imply M-Pesa<br />
users possess or are more ‘in contact’ with a larger<br />
network as a result of using M-Pesa 11 .<br />
Conditional/ Non-conditional Cash Transfers<br />
Conditional cash transfers (CCT) have proven<br />
immensely popular and have grown significantly.<br />
In 1997 only three countries relied on such methods,<br />
a decade later nearly 30 countries had adopted the<br />
technique 12 . They have been adopted by several<br />
non-governmental agencies, though their use and<br />
analysis, especially from an academic standpoint on<br />
financial inclusion, remains relatively low 13 .<br />
MFS offers a further opportunity to distribute CCT<br />
as adoption rates continue to reach the previously<br />
‘unbanked’. While this might prove more efficient, it<br />
is not without risk, especially if they were to reach the<br />
wrong recipient 14 . Evidence suggests that sharing<br />
mobile phones is common practice in many of the<br />
African communities studied 15 - it would therefore be<br />
difficult to be completely certain of who will access<br />
the funds.<br />
Even so, CCTs programmes can encourage the<br />
use of MFS by requiring or at least incentivising<br />
individuals to opt into these products. From there,<br />
beneficiaries have access to financial instruments,<br />
thus contributing to greater financial inclusion. It<br />
is here that MFS might intersect with several other<br />
areas such as mAgri and mHealth – both of which are<br />
discussed in more detail below.<br />
Safety<br />
MFS has also proven useful as a means of safety to<br />
avoid possible cash theft. One study found MFSs were<br />
being used extensively for very short-term transactions<br />
of less than two hours 16 . It seemed customers were<br />
using MFS as a storage device to avoid carrying cash.<br />
The researchers were able to quantify how much<br />
customers were willing to pay 17 for this benefit.<br />
Though there has been this noted increase to<br />
customer safety, many criminals have started<br />
targeting MFS agents 18 . Recent surveys conducted<br />
with Network Agents have found the threat of armed<br />
robbery remains a top three concern 19 . However, it<br />
must be noted that this threat has reduced between<br />
2013 and 2014 (from 0.71 to 0.55 20 ). For both years the<br />
greatest concern of agents remained the risk of<br />
fraud 21 22 and having to deal with customers when an<br />
error in the service occurs.<br />
Financial Inclusion/ Financial Deepening<br />
Perhaps the biggest benefit of MFS is<br />
its contribution to financial inclusion and ability<br />
to target the previously “unbanked”. Many have<br />
questioned if M-Pesa (the runaway success) has been<br />
able to achieve this aim. There are many statistics<br />
which indicate that it has only managed to attract<br />
the wealthier, urban ‘already banked’, educated<br />
citizens of Kenya 23 . Though correct, these are only<br />
the characteristics of early users: parallel to those<br />
innovators and early adopters demographics noted<br />
in the technology adoption lifecycle.<br />
38
Overall the numbers are hugely positive. Those<br />
excluded from financial services in Kenya has dropped<br />
from 39.3 to 25.4 percent between 2006 and 2013 24 .<br />
More recent adopters (of M-Pesa) are less affluent<br />
and account for 72 percent of the total consumption<br />
Improvements in Financial Inclusion:<br />
Total Consumption of M-Peas<br />
(Original against Current)<br />
39.3 %<br />
25.4 %<br />
Financially Excluded<br />
100 72<br />
2007 2014<br />
Total consumption<br />
of early adoption<br />
of the early adopters indicating its continued<br />
penetration among less wealthy individuals. In fact,<br />
MFS is slowly being adopted by a broader share of<br />
the population. The key figure being that the rate of<br />
adoption of M-Pesa in ‘unbanked’ households doubled<br />
between 2008 and 2009 25 .<br />
MFS has also increased financial deepening across<br />
the continent. This can be noticed in the ‘ripple’<br />
effects caused through MFS’s introduction. Since<br />
its launch M-Pesa has given its users, many of<br />
whom were previously unbanked, access to many<br />
financial products – see Financial Deepening<br />
Through M-Pesa below.<br />
As a result several African countries are looking<br />
at ways by which to better regulate the new sector,<br />
ensure market fairness and safety by reviewing<br />
their AML/CFT procedures, and reap the full benefits<br />
of financial inclusion: all components of financial<br />
deepening. However, it is important to note that<br />
financial inclusion is not an end in itself, but a means<br />
to poverty alleviation. Unfortunately, too many studies<br />
and statistics still fail to focus on MFS’s ability to ensure<br />
this ultimate outcome.<br />
MFS Intersections with mHealth and mAgri<br />
Beyond MNOs, many government and international<br />
stakeholders are considering how best to use this new<br />
development to better distribute welfare payments<br />
and financial aid. One example is through the USAID’s<br />
Better Than Cash Alliance which advocates and<br />
conducts research into the greater use of FinTech<br />
in its work. The alliance has supported economic<br />
development in countries like Malawi 26 .<br />
USAID has also been exploring FinTech options, one<br />
of which includes the use of digital payment 27 for its<br />
programmes in Uganda 28 . The pilot project report<br />
(delivered in March 2014) concluded that it was<br />
successful and that there was “great potential” for<br />
this form of transaction.<br />
Other services such as Changamka and MamaKiba in<br />
Kenya are targeted MFSs for outpatient and maternity<br />
care. They encourage pregnant women to save for<br />
health facility-based deliveries and later the ongoing<br />
care of their baby. In Ghana, MicroEnsure (in<br />
collaboration with Tigo and Bima) and in Nigeria (with<br />
Airtel) has developed a freemium opt-in model for life<br />
insurance. This gift has been developed presumably<br />
as a means of attracting and retaining clients as the<br />
MFS sector becomes increasingly competitive.<br />
A study of farmers in Mozambique looked at how<br />
FinTech services could have an effect on saving and<br />
the use of fertilizer. The two groups for comparison<br />
in the study were: those paid interest on average<br />
savings by the end of the test period, and those given<br />
training on MFS and fertilizer use to both them and<br />
their two closest friends. Preliminary results indicated<br />
that the farmers from the first group were more likely<br />
to save to receive higher interest amounts, and felt<br />
less pressure to lend to their friends. It demonstrates<br />
the effect customised interest-bearing MFS accounts<br />
could have on savings, MFS adoption, and the<br />
frequency of expenditure.<br />
The Nigerian government has also combined<br />
FinTech and mAgri to improve the communication<br />
with and education of farmers. Though marred by<br />
controversy 29 , the phone-for-farmers project will give<br />
farmers on purchase of their mobile phone an e-wallet<br />
account. From this they will regularly receive vouchers<br />
to spend on fertilizers and seeds at subsidised rates.<br />
The use of FinTech and specifically MFS within Africa,<br />
particularly in the Sub-Saharan region is hugely<br />
significant. It is even more so as many of these services<br />
did not exist on the continent until as recently as 2010.<br />
Moreover, there is clearly more room for growth as<br />
many of the continent’s largest economies: Nigeria,<br />
South Africa, Egypt, Morocco, and Algeria: have yet to<br />
fully exploit their MFS potential.<br />
39
The most successful FinTech, specifically MFS in Africa is M-Pesa. Through its<br />
multiple collaborations – with banks, financial institutes, and various bodies –<br />
it has helped improve financial deepening and reduced the level of financial<br />
exclusion in Kenya.<br />
Financial Deepening Through M-Pesa<br />
Ownership: Safaricom<br />
25% Free Float<br />
40% Vodafone 35% Government of Kenya<br />
Kenya Statistics<br />
Market Share<br />
76.2 % (March <strong>2015</strong>)<br />
Mobile Money Subscribers:<br />
20.6m Mobile Money Subscribers<br />
Agents<br />
85,759 – 79% market<br />
presence of National<br />
Agent Network<br />
Merchant Payments<br />
Ksh 11.6bn ($113 m)<br />
Causing a 5 % decrease<br />
in Kenyan Cash use<br />
Customer can<br />
dispatch<br />
e-money via SMS<br />
text messages.<br />
The M-Pesa system<br />
adjusts the e-money<br />
balances on both<br />
accounts.<br />
E-money can<br />
then be<br />
exchange with an<br />
agent for cash<br />
The individual<br />
sends e-money<br />
to the Agent<br />
Customer can also<br />
top up their<br />
account by going<br />
to an agent with<br />
their phone and ID<br />
Customer tell<br />
the agent how<br />
much they want<br />
to add onto their<br />
phone<br />
Customer<br />
gives the<br />
agent cash, in<br />
exchange for<br />
the e-float<br />
Debited from the<br />
customer’s<br />
M-Pesa account<br />
and credited to<br />
the Agent.<br />
Customer will<br />
receive an SMS from<br />
M-Pesa confirming<br />
the transaction.<br />
How<br />
M-Pesa<br />
Works<br />
Both parties<br />
will receive an<br />
SMS from<br />
M-Pesa<br />
confirming the<br />
transaction<br />
Both parties will<br />
receive an SMS<br />
from M-Pesa<br />
confirming the<br />
transaction.<br />
40<br />
Having entered<br />
their six-digit code<br />
and mobile<br />
They will select enter the<br />
ATM number and receive<br />
Customer can withdraw<br />
money at an ATM by
Financial Deepening Through M-Pesa<br />
Rent payments (LIPA KODI)<br />
Tenants can pay their rent through their<br />
phones. The account links with their housing<br />
agents, landlords and real estate businesses .<br />
Transaction History(SAFARICOM M-LEDGER)<br />
Allows users to keep track of the M-Pesa<br />
account<br />
Insurance/ Health Insurance<br />
M-Pesa users can now pay move into their<br />
Saving and Credit Co-operative (SACCO)<br />
accounts and also pay their insurance premiums<br />
without the need to visit any insurance<br />
offices.<br />
Linda Jamii Micro-Health Insurance: M-Pesa users<br />
are now any to access micro-insurance for<br />
inpatient and outpatient care.<br />
E-commerce (LIPA NA M-PESA ONLINE)<br />
Facilities the use of online shopping using the<br />
available balance on the person’s M-Pesa<br />
account.<br />
@<br />
Facilitating P2G<br />
Many users, through the eCitizen portal, can<br />
access government services and make payments<br />
for a variety of government services.<br />
Faini Chap Chap: Now traffic offenders can pay<br />
their fines through a system linked with a few<br />
law courts in the country.<br />
Current Accounts (M-SHWARI)<br />
Essentially a banking service similar to a current<br />
account allowing users to: save, earn interest,<br />
and borrow using their M-Pesa accounts.<br />
41
Financial Deepening Through M-Pesa<br />
International Remittances (M-PESA IMT)<br />
Allows M-Pesa users to receive international<br />
remittances from over 200 countries through the<br />
partnerships the firm has built with international<br />
remittance services like Western Union.<br />
Fundraising/ Crowdsourcing (CHANGA NA M-PESA)<br />
Raise funds for a variety of projects or events such as<br />
weddings, funerals, charities etc.<br />
Utility Bills (OKOA STIMA)<br />
This is a short-term loan for individuals to use to<br />
pay for their electricity bills.<br />
M-KOPA: A savings account which allows users,<br />
through a pay-per-use instalment plan to<br />
acquire solar energy systems.<br />
School Payments (LIPA KARO NA M-PESA)<br />
Links school payments (e.g. registration, school<br />
fees, fund raising, activity fees) between M-Pesa<br />
users and schools which hold Bank accounts with<br />
Kenya Commercial Bank.<br />
PesaPal: Developed a web-based interface allowing<br />
schools to be able to track various school<br />
payments.<br />
Investment (M-PESA + OLD MUTUAL)<br />
Through this partnership, users of M-Pesa can<br />
create and top-up Unit-based investments<br />
through monthly contributions via their phones.<br />
Merchant Payments (LIPA NA M-PESA MERCHANT SERVICE)<br />
A service which makes it easier for merchants to accept<br />
payment for M-Pesa. Customers can pay for goods and<br />
services via their phones.<br />
42
Incubators<br />
HIGHLIGHTED<br />
START-UP<br />
ENABLERS<br />
There is no shortage of economic growth in<br />
Africa. Six of the world’s ten fastest growing<br />
economies of the past decade are in sub-<br />
Saharan Africa. Here are the many FinTech<br />
accelerators, incubator, and co-working<br />
spaces across the continent supporting the<br />
next generation of entrepreneurs.<br />
ActivSpaces<br />
Based in Douala, Cameroon’s largest city, ActivSpaces<br />
is primarily a technology hub which runs both an<br />
incubation and acceleration programme. It also<br />
offers various levels of membership from the minimal<br />
(providing a well-functioning co-working space)<br />
to the most advanced, the Activation Bootcamp.<br />
Through the Activation Bootcamp members are able<br />
to take advantage of the organisation’s legal team,<br />
mentorship, and seed funding opportunities.<br />
ccHub<br />
Styled as Nigeria’s first open living and incubation<br />
space, ccHub is intended to act as a catalyst for the<br />
many stakeholders in Nigeria’s start-up ecosystem. It<br />
offers a range of supportive systems to its members<br />
including networking opportunities, mentorship,<br />
training and even funding.<br />
Standard Bank Incubator programmes<br />
Developed through Standard Bank as a means to<br />
educate, empower and develop entrepreneurs, the<br />
Bank has created a range of programmes. It includes<br />
two incubators one concentrating on business the<br />
other on technology. It also has a virtual incubator<br />
providing a co-working space in Cape Town and other<br />
locations, and a business development programme<br />
providing 12-months of support for those who have<br />
attended its incubator programmes.<br />
Wennovation Hub<br />
Wennovation is another start-up hub in Nigeria<br />
offering a range of services and programmes.<br />
Among these is its Innovation Management service<br />
which provides firms with advice on how best to build<br />
and develop a business.<br />
43
Accelerators<br />
Flat6Labs<br />
Flat6Labs chooses teams from all over Egypt, and<br />
brings them to Cairo to receive three months of<br />
intensive mentorship and training, culminating in a<br />
Demo Day. Flat6Labs invests between 50,000-75,000<br />
EGP ($8,000 - $12,500) in its start-ups in exchange<br />
for a 10-15 percent equity stake, and offers further<br />
investment of 250,000 EGP ($40,000) in start-ups that<br />
demonstrate promise.<br />
N2V Labs<br />
Officially based in Amman, with access to their centres<br />
in Riyadh, Dubai, Cairo, and Silicon Valley. It was<br />
launched in Feb 2011, by parent company National Net<br />
Ventures. In addition to N2V’s funding vehicles for<br />
seed, early stage and Joint Venture start-ups, N2V<br />
recruits web and mobile talent as entrepreneurs-inresidence,<br />
providing salaries, seed funding and 3-6<br />
months of mentorship and training to accelerate their<br />
ideas into start-ups.<br />
Tech Lab: South Africa<br />
Barclays Africa launched an accelerator for health<br />
and FinTech start-ups in South Africa. It offers a<br />
13-week accelerator program aimed at providing<br />
10 FinTech and e-health start-ups with access to<br />
business mentors, industry leaders, influencers and<br />
other experts.<br />
Tech Lab Africa is also the first program on the<br />
African continent that, in addition to convertible note<br />
financing options, will provide ventures the option to<br />
use a Simple Agreement for Future Equity (S.A.F.E.)<br />
investment structure for immediate financing rounds<br />
during and after the program.<br />
Plug and Play Egypt<br />
Rising Tide Fund provides funds for start-ups on a caseby-case<br />
basis, ranging from $10,000 to $1 million. Plug<br />
and Play provides office space and fulltime mentorship<br />
in Cairo, bringing start-ups to their facilities in Silicon<br />
Valley four times a year for bootcamps to prepare<br />
for potential venture capital investment. It is based in<br />
Cairo, Egypt and was launched in February 2011, by Dr.<br />
Ossama Hassanein of Rising Tide Fund; Saeed Amidi of<br />
Plug and Play International; and Hazem El Wassimy of<br />
Plug and Play Egypt.<br />
Startupbootcamp: South Africa and Kenya<br />
Startupbootcamp’s FinTech accelerator was<br />
announced back in February <strong>2015</strong>, supported by<br />
multiple big brand backing — including financial<br />
services groups Lloyds and Rabobank, payment<br />
giant MasterCard and SBT Venture Capital.<br />
Startupbootcamp argues that having multiple big<br />
brand backers gives its accelerator an edge. Some of<br />
its previous alumni include:<br />
• Creditable; South Africa<br />
Creditable enables credit unions, lenders,<br />
businesses and individuals to give loans to their<br />
customers, employees, suppliers and family<br />
professionally in just five minutes.<br />
• M-Changa; Kenya<br />
M-Changa’s proprietary technology enables<br />
anyone to quickly and inexpensively manage a<br />
remote fundraiser through their mobile phone.<br />
Impact Hub Accra<br />
Hub Accra had already been in existence for two-years<br />
having launched in 2013 before it joined the Impact<br />
Hub Network and was re-branded Impact Hub Accra.<br />
The establishment aims to promote entrepreneurship<br />
within the Ghanaian ecosystem through the many<br />
workshops, events, and programmes it offers.<br />
Tahrir2 (Tahrir Squared)<br />
Tahrir squared was launched on April 1st, 2011, by Samer<br />
al Sahn, the former CEO of software development<br />
company eSpace and Mohammed Gawdat, the<br />
Managing Director of Eastern and Emerging Europe,<br />
Africa, and the Middle East at Google. It is based in<br />
Alexandria, Egypt.<br />
Co-working spaces<br />
The iSpace Foundation<br />
Situated in the capital of Ghana, Accra; iSpace<br />
provides a unique co-working space for the<br />
technology community in the city. It is a non-profit<br />
organisation run using the membership fees and<br />
sponsorships it receives.<br />
JoziHub<br />
A technology hub based in Johannesburg, JoziHub<br />
aims to harness the power of innovation, start-up and<br />
creativity to develop advances in the field of network<br />
and community technology. It is a shared space for<br />
firms offering a range of benefits depending on the<br />
level of membership purchased.<br />
BongoHive<br />
The organisation stands as Zambia’s first technology<br />
and innovation hub having been founded in 2011 in<br />
Lusaka. It aims to build entrepreneurial capacity<br />
for its members through issue-specific workshops<br />
and seminars as well as run developer courses. It<br />
does this through its co-working space, incubator<br />
programme and consulting.<br />
kLab (knowledge Lab)<br />
The mission behind kLab is to promote, facilitate,<br />
and develop ICT solutions in Rwanda (it is based in<br />
Kigali) in an attempt to bolster the entrepreneurial<br />
community in the city. It does this by hosting a<br />
44
number of events and by providing both technical<br />
and business assistance to its members.<br />
xHub Innovation Society<br />
As part of the growing ecosystem in Addis Ababa<br />
in Ethiopia, xHub Innovation Society provides a coworking<br />
space for IT entrepreneurs and supporters.<br />
As part of its membership packages, residents are<br />
able to access its wide network for advice, business<br />
tools, training, and workshops.<br />
iLab: Liberia<br />
iLab Liberia is a non-profit computer laboratory<br />
providing access to cutting-edge technology, expert<br />
IT assistance and a community leveraging technology<br />
for the good of Liberia. It offers free relevant ICT<br />
courses that are open to the public. iLab also hosts<br />
technology events and serves as a meet-up space for<br />
a range of tech enthusiasts and professionals.<br />
Iceaddis<br />
Helps facilitate creative projects and events in the<br />
capital of Addis Ababa by providing them with a coworking<br />
space bringing together entrepreneurs and<br />
creative individuals. It also functions as an innovation<br />
hub. Iceaddis is special because it was the first<br />
innovation hub and co-working space to establish<br />
itself in Ethiopia.<br />
Among its many activities are the consultancy and<br />
start-up support it gives to its members through<br />
the experience of its management team and the<br />
leverage it has gained through some of its strategic<br />
partnerships.<br />
Hive Colab<br />
The organisation is one of the first technology hubs<br />
to exist in Uganda. Situated in Kambala it provides<br />
both a co-working space and an innovation hub for<br />
its residents. The firm offers mentorship, advice and<br />
guidance through its inhouse consultants. It claims<br />
to provide everything a firm needs from creating a<br />
visible identity to market growth.<br />
AlphaCode<br />
AlphaCode based in Sandton (South Africa) is a<br />
shared co-working space for the next generation<br />
of financial services entrepreneurs in the country.<br />
It brings together a variety of influential people in<br />
the FinTech space facilitating collaboration through<br />
its many events, mentorship opportunities and<br />
market insights.<br />
Innovation Centres<br />
CiTi (formally known as Cape IT Initiative)<br />
A technology hub intended to build the capabilities of<br />
the region was established in 1998 and is one of the<br />
oldest technology hubs in South Africa. It is the first<br />
firm to launch both a Digital Currency Hub; and First<br />
Reality Community in South Africa.<br />
Innovations Hub: South Africa<br />
The Innovation Hub’s is Africa’s first internationally<br />
accredited Science and Technology Park. It is a<br />
subsidiary of the Gauteng Growth and Development<br />
Agency, an agency of the Gauteng Department of<br />
Economic Development. The Innovation Hub covers<br />
several key sectors including IT, Biosciences, Green<br />
Technologies and Industrials. The organization is home<br />
to 47 businesses. These are made up of companies<br />
who utilize the Innovation Hub’s Business Incubator<br />
Program which gives them access to complimentary<br />
Wi-Fi connectivity and mentorship.<br />
The Innovation Hub is also behind the launch of<br />
ground-breaking initiatives including the Gauteng<br />
Accelerator Program, an initiative designed to build<br />
entrepreneurial skills in the biosciences sector. It<br />
also breathed life into the Open Innovation Solution<br />
Exchange, a web-based platform that connects<br />
innovators with solution seekers to tackle service<br />
delivery in government and increase competitiveness<br />
in the private sector.<br />
Meltwater Entrepreneurial School of Technology<br />
(MEST): MEST Incubator programme<br />
One of the most famous educational programmes<br />
and incubator hubs operating in the West African<br />
region, MEST offers entrepreneurs sourced from<br />
Ghana and Nigeria, a structured, intensive, full-time<br />
12-month programme. During the programme students<br />
(Entrepreneurs-In-Training - EITs) are given access<br />
to training and mentoring – covering all aspects of<br />
business management (finance, resourcing, sales,<br />
and marketing), specific computing and software<br />
development courses, and soft skills too.<br />
The organisation has a significant amount of financial<br />
backing and has gained international attention<br />
for its work. Of particular mention, though not<br />
necessarily a focus of the enterprise, has been the<br />
increasing number of women who have participated<br />
in its programme. In its <strong>2015</strong> cohort, eight of its 30<br />
EITs were women.<br />
Toward the end of the programme, EITs form teams<br />
to solve a pertinent problem, which they must take to<br />
the market. The most promising, determined through<br />
a pitch to the MEST board, are invited to enter the<br />
MEST incubator which comes with seed funding for<br />
their business. One business which has come from the<br />
programme is:<br />
• MeQasa<br />
A property search engine allowing users to find vacant<br />
spaces for rent or to purchase, for both residential<br />
and business purposes around Ghana.<br />
45
REFERENCES<br />
ESTABLISHED PLAYERS (SANGK)<br />
1. World Data Bank (2014): Population, total.<br />
2. World Data Bank – Most recent values (MRV)<br />
3.World Bank - Denotes the percentage of respondents who report having an account at a bank or another type<br />
of financial institution; having a debit card in their own name; receiving wages, government transfers, or<br />
payments for agricultural products into an account at a financial institution in the past 12 months (% age 15+).<br />
4. Pew Research Centre (<strong>2015</strong>): Cell Phones in Africa ~ Communication Lifeline<br />
5. South African Treasury Department: <strong>2015</strong> Budget Review: Rebalancing the economy for growth<br />
6. Brookings Institute (<strong>2015</strong>): The <strong>2015</strong> Brookings Financial and Digital Inclusion Project Report ~ Measuring<br />
Progress on Financial Access and Usage<br />
7. Joburg Centre for Software Engineering (2014): 2014 JCSE ICT Skills Survey<br />
8. Telkom Business Blog post (<strong>2015</strong>): ICT Skills Gap: How Can We Tackle this Challenge? Available on: 23/04/<strong>2015</strong><br />
(http://www.telkombusinessblog.co.za/?p=2163)<br />
9. Mlitwa, N. and Koranteng, K. (2013), Integration of ICT Into Curricula in Western Cape Schools: The Activity<br />
Theory Perspective, The Journal of Community Informatics, Vol. 9, No. 4<br />
10. World Data Bank (2014): Population, total.<br />
11. World Bank - Denotes the percentage of respondents who report having an account at a bank or another<br />
type of financial institution; having a debit card in their own name; receiving wages, government transfers, or<br />
payments for agricultural products into an account at a financial institution in the past 12 months (% age 15+).<br />
12 Pew Research Centre (<strong>2015</strong>): Cell Phones in Africa ~ Communication Lifeline<br />
13. Organisation for Economic Co-operation and Development – OECD (<strong>2015</strong>), African Economic Outlook:<br />
Nigeria (<strong>2015</strong>); From 6.7 percent to account for roughly 15.2 percent of total government revenue.<br />
14. Johnson, O. (<strong>2015</strong>); Federal Ministry of Communication Technology; 4th ICT Industry Stakeholders Forum ~<br />
Connected for Growth Presentation<br />
15. Okafor, E. (2013); ‘Reforms in the Nigerian Banking Sector and Strategies for Managing Human Resources<br />
Challenges’; European Journal of Business and Management; Vol. 5, No. 18.<br />
16. Okwuke, E. (2014); ‘Cisco laments dearth of ICT Graduates in Nigeria’; Daily Independent, 14th July. Available<br />
from: http://dailyindependentnig.com/<strong>2015</strong>/07/cisco-laments-dearth-ict-graduates-nigeria [Accessed 4-10-15]<br />
17. Adepetun, A. (<strong>2015</strong>); ‘Dearth of IT skills in Nigeria worries experts’; The Guardian, 22nd April. Available from:<br />
http://www.ngrguardiannews.com/<strong>2015</strong>/04/dearth-of-it-skills-in-nigeria-worries-experts [Accessed 4-10-15]<br />
18. Onwe, B. (2013); ‘The Nigerian Financial market and the Challenges of Information technology-based<br />
operational Services’. Arabian Journal of Business and management review. Vol. 2, No. 6.<br />
19. World Data Bank (2014): Population, total.<br />
20. World Bank - Denotes the percentage of respondents who report having an account at a bank or another<br />
type of financial institution; having a debit card in their own name; receiving wages, government transfers, or<br />
46
payments for agricultural products into an account at a financial institution in the past 12 months (% age 15+).<br />
21. Pew Research Centre (<strong>2015</strong>): Cell Phones in Africa ~ Communication Lifeline<br />
22. Ghanaian Ministry of Education, (2013); Basic Education Information; Available from: http://www.ghana.<br />
gov.gh/index.php/gov-t-projects/ministry-of-education [Accessed on: 07-11-15]<br />
23. Government of Ghana ~ Ministry of Communication; Project Document; Available from: http://www-wds.<br />
worldbank.org/external/default/WDSContentServer/WDSP/IB/2005/11/15/000012009_20051115145331/Rendered/<br />
PDF/34330.pdf [Accessed 07-08-15]<br />
24. Botsio, M. (2013); ‘Moving Towards a More Financially Inclusive Ghana’; Available from: http://cfi-blog.<br />
org/2013/07/18/moving-towards-a-more-financially-inclusive-ghana/ [Accessed: 7-11-15]<br />
25. Ghanaian National Communications Authority (<strong>2015</strong>); ‘Mobile Voice Subscription Trends For June, <strong>2015</strong>’<br />
Available on: http://www.nca.org.gh/40/105/Market-Share-Statistics.html [Accessed on: 7-11-15]<br />
26. Appiah Acquaye, N. (<strong>2015</strong>); ‘MTN Ghana holds 2nd Mobile Money forum in Accra’ Available from: http://<br />
www.biztechafrica.com/article/mtn-ghana-holds-2nd-mobile-money-forum-accra/10462/#.Vi-ksfnhDIU<br />
[Accessed: 7-11-15]<br />
27. Takyi-Boadu, C. (2013); ‘Hope City Project Relocated’; 23rd May, Available from: http://www.modernghana.<br />
com/news/465294/1/hope-city-project-relocated.html [Assessed: 7-11-15]<br />
28. Acquah, B. Y. S. Status of implementation of the ICT Curriculum in Ghanaian Basic Schools (2012) Journal of<br />
Arts and Humanities (JAH), Volume 1, No – 3, December<br />
29. Opuni Opoku, N. (2014); ‘Disconnect between education, industry cause of high unemployment – Tony<br />
Aidoo’; 13th Jan.; Available from: http://www.myjoyonline.com/news/2014/january-13th/disconnect-betweeneducation-industry-cause-of-high-unemployment-tony-aidoo.php<br />
[Assessed: 7-11-15]<br />
39. Ashiadey, B. (<strong>2015</strong>); ‘Academia must rethink curricular... to bridge gap within industry’; 19th Aug. Available<br />
on: http://thebftonline.com/business/education/14975/Academia-must-rethink-curricular-to-bridge-gapwith-industry.html%5d<br />
[Accessed: 7-11-15]<br />
31. Omidyar Network, (2013); Accelerating Entrepreneurship in Africa: Understanding Africa’s Challenges to<br />
Creating Opportunity-driven Entrepreneurship<br />
32. World Data Bank (2014): Population, total.<br />
33. World Bank - Denotes the percentage of respondents who report having an account at a bank or another<br />
type of financial institution; having a debit card in their own name; receiving wages, government transfers, or<br />
payments for agricultural products into an account at a financial institution in the past 12 months (% age 15+).<br />
34. Pew Research Centre (<strong>2015</strong>): Cell Phones in Africa ~ Communication Lifeline<br />
35. The East African Marine System (TEAMS): TEAM’s vision is to become the “leading provider of cost effective<br />
international fibre optic bandwidth in Africa”<br />
36. E-government is defined on the website as “E-government generally involves using ICTs to transform<br />
both back-end and front-end government processes and provide services, information and knowledge to<br />
all government customers that is the public, businesses, government employees and other government<br />
agencies.” Available from: http://www.information.go.ke/?p=292 [Assessed: 7-11-15]<br />
37. Ndung’u, N., Thugge, K., and Otieno, O. (2009); Unlocking the Future Potential for Kenya: The Vision 2030;<br />
Available on: http://www.csae.ox.ac.uk/conferences/2009-edia/papers/509-owino.pdf [Assessed: 7-11-15]<br />
38. Sterling Capital Limited (<strong>2015</strong>); Kenya’s Sector Outlook <strong>2015</strong><br />
39. Herbling, D. (2014); ‘KRA ranks Safaricom top taxpayer for seventh year’; Business Daily; 21st Oct. Available<br />
from: http://www.businessdailyafrica.com/KRA-ranks-Safaricom-top-taxpayer-/-/539546/2494830/-/<br />
fi7bshz/-/index.html; [Assessed: 7-11-15]<br />
47
40. Financial Times, (<strong>2015</strong>); ‘The Africans who got it alone to cut risk, not increase it’; 11th Sept; Available from:<br />
http://www.standardmedia.co.ke/business/article/2000175990/the-africans-who-go-it-alone-to-cut-risknot-increase-it<br />
[Assessed on: 7-11-15]<br />
41. United Nations Children’s Fund – (UNICEF), (2014); A (Private) Public Space ~ Examining the Use and Impact<br />
of Digital and Social Media Among Adolescents in Kenya.<br />
42. United Nations Educational, Scientific and Cultural Organisation (UNESCO); (<strong>2015</strong>) Information and<br />
Communication Technology in Education in Sub-Saharan Africa ~ A comparative analysis of basic<br />
e-readiness in schools.<br />
43. Ogembo, J., Ngugi, B., and Pelowski, M., (2012); Computerizing Primary Schools in Rural Kenya: Outstanding<br />
Challenges and Possible Solutions; The Electronic Journal of Information Systems in Developing Countries; Vol.52<br />
RISING STARS<br />
1. Central Statistical Agency of Ethiopia, (2012); Population Projections 2012.<br />
2. World Data Bank (<strong>2015</strong>): Population, total.<br />
3. World Data Bank (<strong>2015</strong>): Population, total.<br />
4. The Mobile Economy, Sub-Saharan African <strong>2015</strong> (GSMA)<br />
5. Relevant sections for the purpose of this report include: the provision of business investor information,<br />
provision of business loans, and fine collections amongst other services.<br />
6. Relevant sections for the purpose of this report include: motor insurance renewal, collection of traffic<br />
fines, and online ticket booking.<br />
7. Fekade, B. (2013); ‘Ethio ICT Village to embrace 15 companies’; 23rd March; The Reporter; Available from:<br />
http://www.thereporterethiopia.com/index.php/news-headlines/item/253-ethio-ict-village-to-embrace-15-<br />
companies [Accessed on: 8-11-15]<br />
8. National Bank of Ethiopia, (2012); Licensing and Supervision of The Business of Financial Institution ~<br />
Regulation of Mobile and Agent Banking Servicers<br />
9. The World Bank, (<strong>2015</strong>); The Little Data Book on Financial Inclusion ~ Global Findex Database 2014<br />
10. Central Agency for Public Mobilisation and Statistics (CAMPUS) ~ Population clock, (<strong>2015</strong>); Accessible from:<br />
http://www.capmas.gov.eg/?lang=2 [Accessed on: 8-11-15]<br />
11. World Data Bank (2012): Population, total.<br />
12. World Data Bank (2012): Population, total.<br />
13. Groupe Speciale Mobile Association (GSMA), (<strong>2015</strong>); Subscriber penetration figures ~ The Mobile Economy:<br />
Arab States.<br />
14. World Bank Data (2014); Gross Domestic Product ~ GDP.<br />
15. Cillers, J., Schunemann, J., and Moyer, J., (<strong>2015</strong>); ‘Power and Influence in Africa: Algeria, Egypt, Nigeria and<br />
South Africa’; African Futures Paper 14, March <strong>2015</strong><br />
16. Egypt: Central bank conducts financial inclusion survey, (<strong>2015</strong>); 27th Sept.; MEIR eDaily; Available at: http://<br />
www.asiainsurancereview.com/News/View-NewsLetter-Article/id/33901/Type/middleeast/Egypt-Centralbank-conducts-financial-inclusion-survey<br />
[Accessed on: 8-11-15]<br />
17. MasterCard Press release, (<strong>2015</strong>); Available at: http://newsroom.mastercard.com/press-releases/egyptiangovernment-and-mastercard-collaborate-to-extend-financial-inclusion-to-54-million-citizens-throughdigital-national-id-program-2/<br />
[Accessed on: 8-11-15]<br />
18. World Data Bank (2014): Population, total.<br />
48
19. Instituto Nacional de Estatistica, (2014); Angolan Population Consensus 2014 ; Available from : http://www.<br />
ine.gov.ao/xportal/xmain?xpid=ine [Accessed on : 8-11-15]<br />
20. World Data Bank (2014): Population, total.<br />
21. BuddeComm, (<strong>2015</strong>); Angola – Telecoms, Mobile and Broadband – Statistics and Analyses.<br />
22. United Nations ~ Department of Economic and Social Affairs: Population Division, (2014); Population Facts;<br />
August <strong>2015</strong>, no. 2014/2<br />
23. Awad, M. (2012); ‘Angola aiming for telecommunications satellite in 2014’; IT News Africa; 20th November<br />
24. The Mobile Economy, Sub-Saharan African <strong>2015</strong> (GSMA)<br />
25. Deloitte, (2014); Angola 2014 Banking Review: Annual performance of the sector in Angola.<br />
26. World Data Bank (2014): Account (% age 15+).<br />
FINTECH (MFS) REGULATIONS<br />
1. Making Finance Work for Africa (MFW4A); (2012); Morocco: Financial Sector Profile; Available from: www.<br />
mfw4a.org/morocco/financial-sector-profile.html [Accessed on: 8-11-15]<br />
2. BuddeComm, (<strong>2015</strong>); Morocco – Telecoms, Mobile and Broadband – Statistics and Analyses.<br />
3. The objective of the project was “a comprehensive package of technical assistance and capability building<br />
aimed at supporting the new regulatory framework of payment service providers” in Morocco. Proposal<br />
Document to Coordination Unit (November 2013)<br />
4. ‘Société Anonyme’ (S.A) and Société Anonyme à Responsabilité Limitée (S.A.R.L) respectively.<br />
5. Chakravorti, B.; (2014); The Hidden Costs of Cash, Harvard Business Review; Available from: https://hbr.<br />
org/2014/06/the-hidden-costs-of-cash [Accessed on: 8-11-15]<br />
6. Firpo, J., El Sayed, C., Breul, P., (2011); International Finance Corporation – IFC Mobile Money Scoping, Country<br />
Report ~ Egypt<br />
7. Wahome. M, (2008); Michuki: Probe Cash transfer; Daily National; 9th December<br />
8. Tumusiime-Muteile, E. (<strong>2015</strong>) ; ‘Effective regulations will further enable ICTs to promote financial inclusion’;<br />
Speech by Governor of the Bank of Uganda ~ Digital Impact Awards Africa<br />
9. Commonly referred to collectively as ‘telecos’<br />
10. Also known as ‘Banque Nationale du Rwanda (BNR)’ as most legislation is given in French, Kinyarwanda, and<br />
English: the three official languages of the nation.<br />
11. See art. 2 (3) n° 06/2012 of 21/06/2012 “bank, a nonbank financial institution or a microfinance institution within<br />
the meaning of the Laws governing those institutions and duly supervised by the Central Bank”<br />
12. See art. 21 n° 06/2012 of 21/06/2012 “Financial institutions and mobile network operations shall be interconnected<br />
to offer services to virtually all banked and unbanked” allowing the easy transfer of money between<br />
different providers.<br />
13. See art. 2 (8) n° 06/2012 of 21/06/2012 “any entity providing services enabling cash deposits and withdrawals,<br />
execution of Payment Transactions... Money Remittance and any other services functional to the transfer<br />
of money”<br />
14. http://www.afi-global.org/sites/default/files/publications/tanzania-national-financial-inclusionframework-2014-2016.pdf<br />
15. Paper Delivered at the EFInA by Emmanuel Obaigbona (Regulatory Frameworks for Mobile Payments<br />
Services in Nigeria)<br />
49
MOBILE FINANCIAL SERVICES COLLABORATIONS<br />
1. Obulutsa, G. (<strong>2015</strong>) ; Kenya’s Equity Bank starts mobile pay service to challenge Safaricom. Reuters; 20th<br />
Jul. Available from: http://www.reuters.com/article/<strong>2015</strong>/07/20/kenya-eqty-bnk-idUSL5N1001P2<strong>2015</strong>0720<br />
[Accessed: 10-11-15]<br />
2. Equity Banking Group (<strong>2015</strong>); Investor Briefing& Performance Q3 <strong>2015</strong> Performance (Oct. <strong>2015</strong>)<br />
3. Special Correspondent (<strong>2015</strong>); East Africa: Safaricom Increases Charges to Equitel Customers; 26 Aug.<br />
Available at: http://allafrica.com/stories/<strong>2015</strong>08261340.html [Accessed on: 10-11-15]<br />
4. Makakane, M. (2014); Collaboration between Alliance Insurance, Vodacom M-Pesa, and Econet Ecocash, a<br />
smart move towards making financial services more accessible to farmers in remote areas; 4th Mar.; The<br />
Silo; Available at: http://www.thesilo.co.ls/collaboration-between-alliance-insurance-vodacom-m-pesaand-econet-ecocash-a-smart-move-towards-making-financial-services-more-accessible-to-farmers-inremote-areas/<br />
[Accessed on: 10-11-15]<br />
5. GSMA: The Mobile Economy Sub-Saharan Africa, <strong>2015</strong><br />
6. It was rebranded in 2009, following the Acquisition of Jataayu Software as Comviva.<br />
7. The UEMOA countries consist of: Senegal, Ivory Coast, Togo, Benin, Niger, Mali, Burkina Faso and Guinea<br />
Bissau.<br />
SECONDARY EFFECTS OF FINTECH IN AFRICA<br />
1. GSMA: Taxation and the growth of mobile in East Africa (2009)<br />
2. GSMA: Mobile Economy Sub-Saharan Africa (2013)<br />
3. Ibid.<br />
4. Zollman, J., and Cojocaru, L. (<strong>2015</strong>); Cashlite report: Are we there yet? Rethinking The Evolution of Electronic<br />
Payments in Kenyan Based On Evidence in the Kenyan and South African Financial Diaries. Nairobi, Kenya:<br />
FSD Kenya<br />
5. Jack, W., and Suri, T. (2011); Mobile money: The Economics of M-Pesa; NBER Papers in Productivity, Innovation<br />
and Entrepreneurship<br />
6. Walker, E.J, and Adams, C.S. (<strong>2015</strong>); Mobile Money and Monetary Policy in East African Countries; University<br />
of Oxford.<br />
7. It should be noted that their study focussed primarily on East African countries that had adopted MFS.<br />
8. Aron, J. and Muellbauer, J. (<strong>2015</strong>); Does mobile money cause inflation: Evidence from inflation models for<br />
Uganda. [VOX Draft]<br />
9. Aker, J. C., and Mbiti, I.M., (2010); «Mobile Phones and Economic Development in Africa; Journal of Economic<br />
Perspectives, 24(3): 207-32.<br />
10. InterMedia, 2013, “Mobile Money in Tanzania: Use, Barriers and Opportunities”, Available at: http://www.<br />
intermedia.org/mobile-money-in-tanzania-use-barriers-opportunity-2/ [Accessed on: 10-11-15]<br />
11. NBER: Working Paper Series; Mobile Money: The Economics of M-Pesa<br />
12. Campos, N. F., and Coricelli, F. (2010); How financial development can maximise the impact of social protection<br />
policies in low-income countries; Available from: http://www.voxeu.org/article/how-cash-transfers-boostfinancial-development<br />
[Accessed on: 10-11-15]<br />
13. Ibid.<br />
50
14. Aker, J. C., and Mbiti, I.M., (2010); «Mobile Phones and Economic Development in Africa; Journal of Economic<br />
Perspectives, 24(3): 207-32.<br />
15. Ndiwalana, A., Morawczynski, O., and Popov, O. (2012); Mobile Money Use in Uganda: A preliminary Study:<br />
Found nearly 70 percent (69.6) reported sharing ownership of their mobile handsets.<br />
16. Economides, N. and Jeziorski, P. (<strong>2015</strong>) Mobile Money in Tanzania; Available from: http://www.stern.nyu.edu/<br />
networks/Mobile_Money.pdf [Accessed on: 10-11-15]<br />
17. In this study 400 shillings extra per kilometre<br />
18. Etukuri, C. And Masaba, S. (2013); Who is killing mobile money agents?; 22 May; New Vision; Available from:<br />
http://www.newvision.co.ug/news/643042-who-is-killing-mobile-money-agents.html [Accessed on: 10-11-15]<br />
19. Helix – Institute of Digital Finance (<strong>2015</strong>); Agent Network Accelerator Survey: Kenya Country Report 2014<br />
20. Figures are the weighted average of the first three choices then indexed between both years to allow<br />
better comparisons.<br />
21. Mukumuza, K. M, and Ainebyoona, E, (<strong>2015</strong>); MTN denies Shs21b mobile money fraud; 23rd Mar.; Daily Monitor;<br />
Available from: http://www.monitor.co.ug/News/National/MTN-denies-Shs21b-mobile-money-fraud/-<br />
/688334/2662424/-/5cv7qdz/-/index.html [Accessed on: 10-11-15]<br />
22. Asare-Donkoh, F. (<strong>2015</strong>); Mobile Money system in Ghana may be teh next big challenge in dealing with money<br />
laundering – Thompson Essel; Available from: http://www.eyeghana.com/mobile-money-system-in-ghanamay-be-the-next-big-challenge-in-dealing-with-money-laundering-thompson-essel<br />
[Accessed on: 10-11-15]<br />
23. Jack, W., and Suri, T. (2011); Mobile money: The Economics of M-Pesa; NBER Papers in Productivity, Innovation<br />
and Entrepreneurship<br />
24. Central Bank of Kenya & FSD Kenya (2013); FinAccess National Survey 2013: Profiling developments in financial<br />
access and usage in Kenya<br />
25. Ibid.<br />
26. Chilumpha, F. And Msowoya, N. (<strong>2015</strong>); Malawi takes key step to advance digital payments and drive inclusion<br />
growth; 30th April; Better-Than-Cash; Available from: https://www.betterthancash.org/news/mediareleases/malawi-takes-key-step-to-advance-digital-payments-and-drive-inclusive-growth<br />
[Accessed on:<br />
10-11-15]<br />
27. Digital payments are defined “as a programme related payment using an e-payment process and not be<br />
physical cash or checks” (Digitizing Payments for USAID Beneficiaries in Uganda, 2014. pp. 88)<br />
28. USAID, (2014); Digitizing Payment for USAID Beneficiaries in Uganda – Pilot Report; Available from: https://<br />
www.usaid.gov/sites/default/files/documents/1860/Digitizing_Payments_for_USAID%29Beneficiaries_in_<br />
Uganda.pdf [Accessed on: 10-11-15]<br />
29. Eze, A. and Maduekwe, O. (2013); Phone for Farmers and Mobile Money Initiative; 7th Feb.; This Day Live;<br />
Available from: http://www.thisdaylive.com/articles/phone-for-farmers-and-mobile-money-initiative/138703<br />
[Accessed on: 10-11-15]<br />
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