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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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