African Fintech Experts Highlight Key Challenges and Opportunities at 2024 African Fintech Festival
During the 2024 African Fintech Festival, organized by the Association of Fintechs in Kenya (AFIK) and the Africa Fintech Network (AFN), technology experts discussed critical issues impacting the fintech sector across the continent.
Despite the African Continental Free Trade Area (AfCFTA) going live on January 1, 2021, the lack of seamless continental payment solutions and protections for small and medium enterprises (SMEs) against foreign exchange losses remains a significant hurdle.
Leone Kiptum, Senior Vice President for East Africa at Flutterwave and AFIK board member, highlighted the volatility of African currencies as a major challenge. “At any one time, we are dealing with a lot of volatility around our currencies across Africa, which poses a challenge for remittances because the value is changing laterally every hour,” Kiptum explained.
Fintechs are recognized as pivotal to boosting intra-African trade, which currently stands at 16% compared to 68% in Europe, 59% in Asia, and 55% in America. The festival’s speakers emphasized the need for enhanced communication infrastructure to improve connectivity and support the adoption of fintech solutions.
According to GSMA, as of 2022, 15% of Africa’s population lacked access to mobile broadband, while another 40% had access to broadband but no devices to use it. Adrian Pillay, Sales Vice President at Provenir, stressed the role of fintechs in driving innovation and accessibility. “It’s fintechs that are going to drive the type of innovation and breakthroughs needed to achieve this faster and make it accessible to everyone,” Pillay stated.
Financial regulators, especially central banks, have cited limited technical and financial resources and a lack of clear regulatory mandates as obstacles to the fintech ecosystem’s ability to facilitate cross-border trade through Application Programming Interfaces (APIs).
“The significant differences in how our central banks across Africa manage licensing is a challenge. I have to go through different processes in every market to get a license to operate. Can we find a standard?” Kiptum asked.
AFIK Board Member Mary Mwangi echoed this sentiment, calling for standardized regulations across the continent. “The standards need to be the same. It should not depend on which country I am going to nor the type of integration I am working with,” Mwangi noted.
The festival underscored the critical need for unified regulations and robust infrastructure to support fintech growth, aiming to enhance financial inclusion and foster economic development across Africa.
