There are two words used by the International Monetary Fund (IMF) in its analysis of fintech in Sub-Saharan African countries – game changer. While fintech is a global phenomenon – digital reshaping the structure of the industry and adding much-needed elasticity and scale – in Africa, it is an innovation.
How grassroots fintech and innovation can translate to the global stage
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It is the use of digital and ingenuity to overcome challenges that are unique to the continent, and relevant to the rest of the world. For the IMF, it is the opportunity to ‘foster inclusive economic growth and development’ while challenging traditional approaches and use cases. For VT Rikhotso CTO of Basalt, it is solving problems with ingenuity.
“South African fintech has a competitive advantage because we dig deeper into the challenges and find intuitive solutions,” he adds. “The skills that we bring to the table are on a par with the global market, but at a far more competitive price point. And our mobile-first culture, agile approach to problem-solving, and our technology and UX approaches are geared towards the mobile consumer.”
International organisations are paying attention to the ingenuity that comes from the African continent, and the unique ways in which entrepreneurs solve ongoing problems within the sector. This, plus the agility that comes with working within limited infrastructure and complex conditions, makes the African solution a fresh prospect for the UK organisation.
“We have learned a great deal from the pandemic and how it important it is for the business to respond rapidly and easily to change,” he adds. “Shifts in traditional ways of working and doing business made the news throughout 2020, and this is a trend that’s very likely to continue as companies realise the value of people and process. And this is how we’ve always approached innovation in fintech – finding contexts and challenges that our solutions can solve within tight infrastructure restrictions.”
And it is infrastructure that limits much of Africa’s growth. A lack of access to resources, data, connectivity, and even banking services excludes large parts of the population. The goal is to find fintech solutions that are inclusive, that leapfrog the complexities that inhibit access to finances for the unbanked. The fintech startup sector in Africa is in the process of solving these problems but finding ways to connect with the unbanked remains a challenge.
“It’s important to innovation around fintech and services in the African context because our complexity introduces something special to the equation,” says Rikhotso. “In first world countries, fintech solutions are global at scale and reach, but rarely understand the nuances of the local market. They miss the detail of Africa and the needs of the people. By understanding how to pull the unbanked here into banking, by speaking to the people on the ground, African fintech can implement bold learnings that can fundamentally change how global fintech deals with its customer base.”
African innovation is forced to see the individual. The scale of the developed world market isn’t here, yet, but the people are. By validating assumptions about the market really early on, by moving a minimum viable product in front of the end-user as early as possible, startups can gain a far richer understanding of what the user really needs and how to ensure the final product meets these needs.
“Most startups are looking for a lot of runway with their funding and spend a lot of time on the design phase,” says Rikhotso. “Instead of doing that, we’ve realised that the real problem lies in understanding the customer. What do they really need in order for the solution to work? This realisation fundamentally changes the approach that the company takes to the market and makes the final product far more relevant.”
African fintech built on the foundations of people and ingenuity brings a deep relevance to the global community.
The tools and solutions adapted to leapfrog infrastructure challenges and cost complexity can be easily leveraged within these markets to take existing solutions further and to resolve legacy challenges that exist in those markets.
“We look at things differently, something that can go missing when there are hundreds of startups running into the same market concurrently – we compete on individuality and the individual where global solutions tend to compete only on functionality,” concludes Rikhotso. “We look at both sides of the problem and resolve the problems as they arise, introducing a flexible and scalable mindset that bypasses silos and takes a more holistic view of the business.”
African startups have a knack for translating gaps and legacy technology into something remarkable.
This ingenuity is powered by limited access to resources and toolkits, the need to explore new horizons, and overcome frustrating, endemic challenges. Future success lies in building bridges, tackling opportunity, and connecting the potential of Africa to the rest of the world.
This article was written by VT Rikhotso, CTO of Basalt Technology.
Featured image: VT Rikhotso, CTO of Basalt Technology (Supplied)