The financial services landscape holds more opportunity in Africa than it does in other regions. That may seem a bold statement to make, but while all eyes are usually turned to the US, Europe and China when it comes to financial innovation, Africa is silently growing much faster in the background. This is particularly true in the fintech, cryptocurrency and mobile payments sectors.
There’s no doubt that financial services have become more accessible over the years, however, there is still a large portion of the African continent that still don’t even have access to a bank account. More than 50 per cent of the African population lack some of the most basic forms of financial services. With more than 50 per cent of the African continent considered to be “unbanked” the opportunities for the fintech and crypto industries are exponentially growing.
Africa: The unbanked continent
Traditional banks continue to face significant challenges when it comes to reaching the unbanked population in Africa. This is largely due to the lack of basic infrastructure and financial literacy. Furthermore, the vast majority of people in Africa simply do not earn enough money to justify opening a bank account. People simply can’t afford the fees to maintain a bank account so they would rather stick to what they know: physical cash.
This lack of infrastructure and financial literacy, combined with the exorbitant fees associated with traditional financial services has enabled massive opportunities for fintech and crypto in Africa.
The opportunity in Africa
For the unbanked population of Africa, fintech and crypto provide them with easy access to essential financial services.
Mobile money services
Mobile money services are extremely popular for serving the needs of the unbanked population in Africa. Mobile money services like M-Pesa successfully provide the unbanked population with access to cheaper, more convenient financial services. These mobile money services create greater financial inclusion within the African continent.
Cryprocurrencies like Bitcoin and Ethereum have grown in popularity over the past few years. As we have seen in the past, money can evolve, and it’s clear that cryptocurrencies are the next form of money. Cryptocurrencies provide a faster, cheaper and more efficient way to transact. With cryptocurrencies, cross border payments can be made in a matter of seconds, unlike with traditional financial services.
Furthermore, bank transfers tend to be expensive, while cryptocurrencies provide a cheaper way to transact and send money internationally. Cryptocurrencies are slowly improving financial inclusion for the unbanked in Africa and the rest of the globe. Crypto provides access to cheaper financial services with greater security.
In countries where the traditional financial system is well established, it takes more effort to replace them. In Africa, however, there is very limited access to traditional financial services. This creates the perfect environment for the fintech and crypto industry to thrive acrossAfrica.
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