Africa-focused financial technology startups are, by far, the tech rave of the moment. In each of the last three years, startups in the sector have received more investment than other sectors – and there’s a basis for this.
Across the continent, fintech isn’t so much disrupting traditional financial services as building up a historically underdeveloped industry. By creating a raft of tech-based products and solutions, including mobile money, online payment processing, lending, and investing, these startups are plugging large gaps that exist in local financial service industries. Here’s a list of ten fintech companies in Africa :
Branch:
Branch is an online moneylender that provides single payment loans, installment loans and payroll loans for borrowers. The amount borrowed is then deducted from your account. … Interest rates are determined by a number of factors, including your repayment history and the Branch cost of lending. Branch co-founders, Matt Flannery and Daniel Jung, developed a tool used to verify the creditworthiness of Africans. This tool is used to measure a population’s credit based on smartphone data. The approval process is fast and gives people the opportunity to create credit, regardless of their banking history without paperwork or red tape. These executions are made possible by the use of a machine learning algorithm built by the branch team. In one of the largest Series C funding rounds ever raised by an Africa-focused startup, mobile lending app Branch International has raised $170 million.
The round is led by Foundation Capital and Visa with participation from B Capital, Andreessen Horowitz, Formation 8, and Trinity Ventures. The funding comprises $100 million debt financing and $70 million in equity. Branch International, which has more than 3 million users in Kenya, Nigeria, and Tanzania, as well as India and Mexico, uses smartphone data including GPS data, call logs, contact lists, and texts such as bank balance messages and bill payment receipts to determine credit worthiness. In Africa, it makes loans ranging from $2 to $700 for up to 68 weeks, charging interest rates of up to 21% in Nigeria and Tanzania and up to 14% in Kenya.
Tala:
Tala is a mobile technology and data science company that is oriented around financial services in emerging markets. Tala was founded by an attractive Indian entrepreneur, Shivani Siroya. She has a solid background in consulting and investment banking. It is a four year old company based in Santa Monica, California, that makes micro-loans in Kenya, Tanzania and the Philippines. The company uses a mobile phone and behavioural data to provide instant loans. Anyone with an Android smartphone can apply for a loan from Tala. The company’s financing options range from $10 to $500, with an average of $100. The entire lending process (including money distribution) is done on a mobile platform. Tala’s vision is to enable financial agency for all. We define agency along three core pillars: creating access, choice, and control for the financially underserved and underestimated worldwide.
Interswitch:
Interswitch is an Africa-based integrated digital payment and commerce company. They are known for facilitating the timely and permanent exchange of money and values between individuals and organizations. Interswitch was founded in 2002 by Mitchell Elegbe. In 2010 two thirds of the company was sold to a consortium led by Helios Investment Partners. In 2011 Interswitch took a 60 per cent stake in Bankom in Uganda. Interswitch is known as an electronic transaction switching company that designs and manages payment infrastructure. They also provide innovative payment products and transaction services across the African continent. Their solutions and services are secure. They provide convenience and real value for consumers. They also reduce costs, improve operational efficiency as well as drive sustainable revenue growth for institutions.
Jumo:
JUMO is a full technology stack for building and running financial services. Credit. Our lending products give entrepreneurs quick access to funds or asset finance. Savings. JUMO builds and operates short-term, structured and long-term savings products that bear interest. Jumo was founded by Andrew Watkins-ball. Its African goal is to provide financial services to 1.7 billion people who have so far been denied access to financial assistance or have been pressured by traditional banking companies. It is discussed to be a B2B firm that has built a scalable and automated platform based on a microcircuit architecture. Watkins-Ball says the sky’s the limit, with Jumo able to be expanded into anything that is non-physical.
“It’s like Amazon for anything that is non-physical, Amazon for financial services,” he said.
Paga:
Paga is a mobile payment company building an ecosystem to enable people to digitally send and receive money, creating simple financial access. Paga was founded April 5th 2009 by Tayo Oviosu and Jay Alabraba on the simple belief that the ubiquity of mobile phones can be leveraged to bring financial services to all. They are building an ecosystem to ease financial access for everyone. One of the most significant possibilities for financial inclusion in Africa is to build a comprehensive mobile payment infrastructure; Paga is doing precisely that by allowing users to store all their cards and bank account resources in one place.
Paystack:
PayStack has developed a technology to help grow the best businesses in Africa from new startups to market leaders launching new business models. Paystack was founded in 2015 by Shola Akinlade and Ezra Olubi, software developers and longtime friends. It is the engine of growth for modern businesses in Africa. It also makes it easy for businesses to accept secure payments from multiple local and global payment channels. Then they provide you with tools to help you retain existing customers and receive new ones.
Nala:
NALA is an application that acts as an interface on top of the mobile money payment systems that allows the user to make transfers, payments, and transactions seven times faster, without data connectivity. Nala was founded in 2017 by a Tanzanian, Benjamin Fernandes, who made Nala the first offline payment processing platform in Africa. This allows customers to view all their financial accounts in one place. The offline mode of the solution also allows users to send and receive funds on their mobile devices without burning valuable data. In Africa, users often have to use more than one SIM card to process transactions through accounts linked to separate mobile numbers. Using Nala, users can make payments to anyone on any device, and it only requires a one-time download to start transacting, according to the company.
Nala has taken all of the short codes from all of the transaction providers and created a router system that users can operate without having to memorize the different underlying coding.
Yoco:
Yoco is a point-of-sale payments provider for small businesses in Africa. Yoco is a B2B company targeting small and medium businesses in Africa founded on January 1 2013 by Bradley Wattrus, Carl Wazen, Katlego Maphai and Lungisa Matshoba. Their original product is a mobile-connected device for accepting card payments through small retailers. Also, Yoco provides other services that help African SMEs in the retail sector grow their businesses, POS software solutions, retail-focused CRM platforms, and various financing options. Yoco does the operation in South Africa.Yoco is an African technology company that builds tools and services to help small businesses get paid, run their business better, and grow. They believe that by opening up more possibilities for entrepreneurs to be successful, we can help create more jobs, enable people to thrive and help to drive our economy forward.
Bankly:
Bankly is a cash digitisation savings product that allows users to top up their wallet using vouchers. Bankly Cash Dependence provides a secure digital savings platform for the informal economy. Bankly was founded on November 27 2017 by Fredick Adams and Tomilola Adejana. Bankly reduces the incidence of fraud and theft among informal fruit savers and creates a digital and financial identity for thin files to access more extensive financial services. Bankley is providing Africans with a secure, decentralized, and accessible digital financial services platform. The goal is to build ecosystems with improved quality of living amongst the under-served.
MyBucks:
MyBucks is a company that embraces technology as a means to provide financial products and services. MyBucks is a virtual bank that started operations in South Africa and is now active in 11 markets in Africa, Luxembourg, and Australia. It was Founded in 2011 by Dave van Niekerk; the company has built several brands so far. With a drive to enhance their product development, MyBucks continually looks to new markets to grow through strategic acquisitions, where they then disrupt and enable, breaking down the barriers of traditional banking and pioneering true financial inclusion.
Conclusion
A recent research from pan-African banking group Ecobank is even more positive. “Africa will experience a financial technology revolution, and can expect its fintech industry to be worth more than $3 billion by 2020” was the main conclusion of this report. Other analysts suggest the number is much higher.
Optimist predictions that reflect the significant opportunities for the fintech industry in Africa due to its unbanked and underserved population. For instance, Africa’s three most populated countries, Nigeria, Ethiopia and Egypt (home to a combined adult population of over 242 million) have low rates of financial inclusion (below 40%). Last year GSMA estimated that only from these three counties could be unlocked over 110 million new mobile money accounts in the next five years. On the other hand, many funding deals of 2019 have fueled several fintech firms with the necessary capital to continue both their geographic expansion and the enrichment of the services they provide.
