Financial inclusion never something you can declare victory over – Tugende CEO

Over the past decade the progress made within financial inclusion has emerged as one of Africa’s great success stories.

According to the World Bank Global Findex survey, released in April, the percentage of Africans with access to banking products in Sub-Saharan Africa increased from 23% in 2011 to 43% in 2017. The increase has largely been driven by the uptake in mobile money products.

Findings published in May by the International Finance Corporation show that Africa is home to more digital financial services deployments than any other region in the world — with almost half of the nearly 700 million individual users worldwide.

‘Financial inclusion is never going to be something you can declare victory on’ – Tugende CEO Michael Wilkerson

But Tugende CEO Michael Wilkerson (pictured above, left) believes financial inclusion “is never going to be something you can declare victory on”.

He was speaking ahead of the African Fintech Unconference (AFU) which takes place next week in Cape Town.

“We see financial inclusion on the cusp of making even greater strides because of an improvement in infrastructure, and this enabling infrastructure is almost entirely private-sector driven,” says Wilkerson, whose startup is a for-profit social enterprise that finances income-generating assets to proven entrepreneurs.

The inter-operability between digital wallets and the revolution in cloud software allows startups like his to service thousands of financing customers without having to get a multimillion-dollar core banking platform.

“But at the end of the day, none of that matters until people can actually use those tools to improve their lives. Those use cases for average consumers are emerging, but there’s a long way to go,” adds Wilkerson.

‘Area becoming more sophisticated’

Nomanini CEO Vahid Monadjem believes that the area of financial inclusion space is becoming a lot more sophisticated.

For Monadjem, whose company runs an enterprise payments platform that optimises transactions in the informal retail sector, there are pieces of the value chain that are “hidden” from consumers that now benefit from improvements in financial inclusion.

“Most people have the picture of a P2P M-Pesa transfer, but there are companies like MFS Africa which are connecting the different islands of financial inclusion.

“Overall, we are seeing exponential specialisation of fintech in different areas where I think there will be a lot more progress,” says Monadjem.

‘Foundation for financial inclusion has been created’

MFS Africa CEO and founder Dare Okoudjou says this foundation is supported by pioneers like his company which connects mobile money schemes to each other and to money transfer organisations, merchants, banks and other financial institutions. In the process this enables money remittances to and from mobile money accounts.

“Now that we have the first layer of financial inclusion, supported by a growing agent network, it opens up opportunities for more use cases such as savings, lending and some form of insurance,” says Okoudjou.

“The question has now become: how do you successfully build and scale these types of services on top of this first layer?” he adds.

Need for more collaboration

A pervasive mentality that everybody is a competitor, says Monadjem, prevents open discussion within the sector.

“There needs to be many more sharing partnerships and connections to do so. We should speak to more of our fellow fintechs, and even non-adjacent fintechs, because let’s face it… it’s a tough gig,” adds Monadjem.

Tugende’s Wilkerson believes that those at companies learn more by openly discussing challenges and opportunities with each other than by trying to figure things out by themselves.

“At the end of the day, execution on the ground matters more – and you cannot patent that,” says Wilkerson. “So you might as well learn from people who are also pursuing the same vision, but in different ways.”

Nomanini, MFS Africa and Tugende are the co-conveners of the second annual African Fintech Unconference taking place at Spier Wine Farm next week Tuesday and Wednesday (25 and 26 September)

Featured image: Tugende CEO Michael Wilkerson in Uganda (Tugende via Facebook)