Financial Inclusion in AfricaOct 20, 2016 Blog Africa , Financial Inclusion
In Africa, the biggest market is the unserved market. Around 80% of the population on Africa’s continent lack access to formal financial services. This indicates why Fintech, as everywhere else in the world, is big business.
In developed economies, Fintech is disrupting the traditional ways of banking and financial institutions, but in Africa nothing is being disrupted at all, because it doesn’t exist. It hasn’t been financially viable for banks to reach the under banked population, but what the population does have access to is mobile phones. In fact, more people have mobile phones than they have access to financial services. Innovators and Fintech start-ups have noticed this need and therefore have identified ways that financial services can be adapted to technology and mobile phones. Various services have been identified, including peer-to-peer lending.
This means that the majority of the African population will never know what it is like to visit the branch of a bank and to make use of the services on offer. Their understanding of financial services, among others, will be marketplace lending. By utilising their mobile phone, they will be able to have access to personal and business loans.
Not only will marketplace lending provide the African population with financial services never used before, but it will also provide the people the opportunity to work together as a community.