Financial technology, commonly referred to as fintech, has the power to boost African economies. The continent, as of 2015, still runs predominantly on a cash system. However, the growing use of mobile devices, which far surpasses the number of existing bank accounts, opens up opportunities for entrepreneurs to develop a payment service. Such a service could address challenges, like sending money to relatives, and also make it convenient to do so from any location and at any time of day.
In support of the fintech movement, Techstars launched its partnership with Barclays Accelerator in Cape Town in 2016. Unlike other opportunities that focus a great deal on South African startups, the 13-week program welcomed applicants from all over Africa. The following are among those that made the first cohort:
1. Social Lender
An extension of Sterling Bank and serving members only within the financial institution’s social media communities, Nigeria-based Social Lender evaluates a person’s social reputation score to determine eligibility for lending quick cash. Scores, determined by social credit officers, represent the length of time a person has been actively involved in the bank’s social network and the quantity of information he or she shares on social media platforms, among other factors. Members can request funds through the Social Lender Platform, which is supported by Facebook and Twitter. Depending on the person, requests upwards of 10,000 Naira are obtainable, though transaction fees do apply. If approved, he or she will receive funds through their existing banking channels. Repayments are equally as easy: the amount must be returned within 30 days. Social Lender eases the process by accepting multiple types of payment options, including mobile money transfers and transactions made at a brick-and-mortar financial institution.
2. iNuka Pap
Headquartered in Kenya, iNuka Pap was named a Spark* Changemaker in 2015 and a Sinapis Fast Track Fellow in 2014. The organization, led by chief executive officer and insurance sales veteran Waweru Kuria, offers financial support to savings and credit cooperative (SACCO) members and microfinance institutions. The company serves those in need of funds to cover hardships. The microloans, available as cash advances, are accessible through the company’s mobile app, but require a daily minimum contribution of $0.02 by its users. In addition to iNuka Pap cash advances, the startup helps people gain access to emergency power and airtime advances as well as micro-insurance services. All are available instantly.
Catering to the underserved population, Tanzanian company bimaAFYA leverages its relationship with EdgePoint to help people obtain micro-health insurance. Its company operates solely over mobile devices and uses automated systems to walk people through steps, such as registering for services, paying insurance premiums, adding dependents, and selecting coverage options. The self-serve approach begins with a call to the company at *150*57#. After successfully registering, the insured will receive a bimaAFYA number through short message service (SMS), also known as text messaging. From there, the number must be presented at health care facilities accepting bimaAFYA insurance, along with a formal identification card bearing the person’s name and photo, to receive service. The health care provider is responsible for verifying insurance, providing care, and sending billing information to the company to obtain payment.
Easing entry and exit to parking garages throughout South Africa, WizzPass is a mobile app that eliminates the need for tickets, access cards, and biometrics. Instead, tenant parking management companies use the app to give people codes that must be entered each time they access or leave a facility. The app does not require an Internet connection and instead uses Bluetooth technology. The result is a more secure and user-friendly system that saves management companies money while delivering real-time visitor and tenant data. WizzPass also expects its service, which is a form of cashless payment that charges fees directly to a credit card rather than requiring a person to input money, to alleviate parking pains for tenants and business professionals as well as consumers heading to a shopping mall to buy goods. Its CEO, Bradley Hornby, aims to expand the cashless service into other areas, like gas stations and vending machines, in the future.
Operating on a mobile app, SimbaPay is available through the Apple and Android app stores. The DigiCert-secure app is a registered party in the European Union, and the company is considered a payment institution by the Financial Conduct Authority and maintains membership with the Association of UK Payment Institutions. It has been recognized by notable media organizations, including Forbes, the BBC, Daily Nation, and Business Day.
SimbaPay enables people to make instant deposits into mobile money and bank accounts in Kenya and Nigeria. Mobile money transactions require M-PESA, a mobile money transfer service that serves millions of people. Money transfers are available between 10 to 5,000 pounds at no cost, and identification processes are completed entirely through the app. Users do not have to worry about their information being stored, as SimbaPay’s policy is never to keep credit or debit card data on its servers.