Africa is a continent defined by its resilience and innovation. Although vastly diverse in its cultures and geography, the continent’s demographic is universally young, with a population of increasingly tech-savvy digital adopters, many looking for local solutions to local challenges.
In this context, it’s perhaps unsurprising that fintech has flourished so dramatically and rapidly across the continent. The introduction of digital financial services is resulting in greater financial inclusion, which in turn is driving much needed economic growth and development.
Continent-wide, the number of fintech companies has tripled since 2020.
In short, the region is experiencing a fintech revolution, driven in part by regulatory advancements from governments seeking to stabilise and grow their economies.
Ghana’s drive for a ‘cash lite’ society, for instance, has led to the drafting of an inclusive digital payments’ ecosystem roadmap, and although the country has had mobile money services since 2010, the introduction of full interoperability between telcos, banks and fintechs has seen a massive increase in mobile money penetration in its domestic banking and transactional market since 2018.
Improving legislation to allow the entrance of new business models has seen the rapid growth of neobanks, with their challenge to traditional banks, whose services have been too complex and inaccessible for many people. To support and advance these efforts, EFT Corporation is bringing its expertise and experience into emerging West African markets and is at the forefront of this shift, offering seamless, secure and scalable customer-centric financial solutions and infrastructure to a range of partners across the region.
Evolving regulatory frameworks
However, as the fintech ecosystem expands, so does the challenges of maintaining security and compliance. As a leading payment enabler delivering modern payment solutions in the West African region, EFT Corporation has expertise in navigating local regulatory complexities, and fostering partnerships that drive digital banking transformation. Understanding these regulatory frameworks is essential for operating effectively in the region’s changing financial ecosystem.
The establishment of regulatory sandboxes across the region has been a significant development in recent years. These controlled environments allow for the research, development and trialling of new products and services under regulatory oversight, but without the full constraints of the marketplace. For example, Ghana piloted regulated sandboxes in 2022 as a way of monitoring and evaluating the payments environment, tailoring products and influencing legislation, allowing for a speedier and safer entry of new products and services into the market.
In addition, while for the vast number of unbanked or underserved communities in Africa, neobanks are a perfect solution, many start-ups lack banking regulatory and compliance expertise, which is where EFT Corporation is able to assist.
Collaboration is key
Recognising that digitisation and the expansion of e-commerce have a large role to play in economic growth, West African governments are actively pursuing collaborative opportunities between public and private financial entities.
In Nigeria, for instance, this forward-looking strategy has led to the rapid rise of mobile money, and the country’s licensing of a number of companies as payment service banks. These offer banking services to the unbanked, especially in rural areas.
Addressing challenges
Although fintech start-ups in West Africa remain a favourite for investors, in real terms, the availability of venture capital and other funding models is declining. VCs are deterred by economic volatility in the region, forcing start-ups to find creative ways to raise capital.
While crowdfunding is one option, it can delay market entry if money is slow to come in, and therefore forging partnerships with existing financial services providers and platforms is a more convenient way of getting into the market. When each partner is able to leverage off the strengths of the other, it creates a win-win situation where small business, big business and the consumer all benefit.
In these markets, EFT Corporation bridges traditional banking with innovative digital products that banks often find challenging to implement alone. Through its core product pillars – Banking-as-a-Service (BaaS), acquiring, issuing, and payment orchestration – EFT Corporation enables transaction processing tailored to the operational and regulatory realities of the West African market.
The company’s expertise, sensitivity to local market contexts and longstanding presence positions it as a trusted and capable payment solutions partner in West Africa.
The company’s expertise, sensitivity to local market contexts and longstanding presence positions it as a trusted and capable payment solutions partner in West Africa.
