- They have been urged to look further into the fields of agriculture, health and education which are largely untapped by fintechs.
- Fintechs have also been urged to endeavor to embed service experiences and payment in one platform.
Image: ALFRED ONYANGO
In an environment characterised by reducing the cost of making digital payments and sending money in a bid to cushion consumers from the heightened cost of living, most fintechs’ future could be hanging in the balance.
This is according to experts in the finance space; bank leaders, financial technology solution builders, CEOs and founders who spoke at a Nairobi forum on Thursday.
They told the digital financial service firms to shift their gears toward other untapped ventures and sectors while addressing consumers’ simple needs such as savings, and credit offerings to stay afloat.
Ali Hussein Kassim, chairman of the Association of Fintechs in Kenya (AFIK) board said the norm of fintechs only focusing on digital payments is not sustainable for growth.
“Digital payments only account for about 20 per cent of payments while the rest is cash payment, a reason enough to believe that dependence on income from charging digital payments will not be good for business in the near future,” Kassim said.
“We need to look further into the fields of agriculture, health and education which are largely untapped by fintechs as they present huge potential for for growth.”
Little App CEO & Group CEO Craft Silicon, Kamal Budhabhatti, concurred this saying tapping into new ventures besides payments is the route to go towards profitability and growth.
“Agriculture sector has been seen to be unattractive by fintechs, but that is not the case. The health sector venture is picking up but we need to move faster and do more,” Budhabhatti said.
He added that fintechs also need to endeavor to embed service experiences and payment in one platform to enhance seamless experience for consumer satisfaction and retention.
Some fintechs present at the forum expressed their pain of being sidelined with big players such as Mastercard and Visa in terms of collaborations.
Wapipay for instance, wondered why it is so hard for them to get to work with the sector giants and yet they have diligently complied with the regulator's set rules.
Mastercard responded to the concern saying most of the fintechs in the country lack the required scale of operation and level of technology as per their requirements for a probable partnership.
The fintechs further lamented the long and tedious regulatory process, taking them years to acquire licensing, a constraint they say to delays their operational plans.
The forum mainly intended to announce the Africa Fintech Festival scheduled for June 12-15 in Naivasha, Kenya.
It seeks to bring together experts from Kenya and the continent at large to explore and share insights on key thematic areas including green finance, policy and regulation, capacity development for regulators in fintech and agri-tech.
Data by Boston Consulting Group shows Africa is the world’s fastest-growing continent when it comes to fintech revenue, with a compound annual growth rate (CAGR) of 32 per cent.
This means that by 2030, the African fintech market will be worth $65 billion, according to the group investors.
Against this backdrop, AFF will further bring together the Pan African Fintech Ecosystem to explore how African businesses can leverage innovation, collaboration and tech to solve the continent’s most pressing challenges.