Africa, and Ghana in particular, is reaping the benefits of rapid fintech growth in the banking sector. Here’s a fintech guide to recent developments in the country…Ghana is enjoying significant growth in digitization and high adoption rates for financial electronic platforms. The rapid growth of internet banking has led to greater financial inclusion for Ghana, particularly in more rural areas where branches are scarce.
A report published last month from the Bank of Ghana cited growth in many areas including mobile money accounts, banking apps, internet banking and point-of-sale. The growth of digital means more revenue streams, as well as less costly transactions and more streamlined processes, increasing banks profitability. In 2018, the number of mobile banking customers in Ghana increased by 84%, and the value of mobile money account transactions increased by almost half (43 per cent.)
Many banks are investing in digitisation, while others are collaborating with fintech companies to boost transaction volumes and therefore increase fee income. Moody’s predicts the increase in internet banking will reduce the operating costs for Ghanian banks, making them more profitable.
Many fintech companies have recognised the great opportunities for growth in Ghana, with fintechs such as Chipper Cash and Paris-based Fair Money now holding offices there. Chipper Cash specialises in cross-border no-fee payments, and partners with Paystack, a payment gateway organisation, to offer its P2P Payment service via an app.
Parisian fintech group FairMoney is also investing in Africa and emerging markets, opening sites in Nigeria, Egypt and Ghana. Speaking to Business Insider, CEO of FairMoney Larin Hainey said the company vision is to build a platform for simple products aimed at emerging markets, to become a one-stop-shop for financial services.
According to World Bank, over 2 billion people struggle to access financial services, and the availability of loans in Africa is very limited due to the lack of credit scoring systems. FairMoney is aiming to provide suitable and accessible services for these unbanked populations.
Meanwhile, in Johannesburg, Standard Bank has teamed up with fintech firm Nomanini to provide credit for retailers and shops that would otherwise have limited access to financial services.
Standard Bank, Africa’s largest bank, has invested $4m in Nomanini’s systems to enable merchants and distributors to connect via an e-wallet. Standard Bank has an ambitious plan to roll out this system to 14 different African countries by 2021.
According to a Deloitte report, 90 percent of retail transactions in Africa are cash or via informal routes including markets and kiosks. The new technology will enable Standard Bank to gather data on transactions, pre-empting re-stock requirements for traders and supporting them by ordering and underwriting their next order.
Standard is aiming to gain a competitive edge over the telecoms companies that currently dominate the digital payments space in Africa. For example, Safaricom, the Kenyan mobile company already enables Kenyans without bank accounts to make digital payment via mobile phone through the M-Pesa platform.
TymeBank, a new digital lender, is aiming to offer business bank accounts in African markets, while Hello Paisa the money transfer company has teamed up with lender Sasfin to target informal retailers.
It appears the
penny has dropped for many big players that there is a wealth of opportunity
for those prepared to invest in digital.
