OPINION: Cashless-society banking requires local solutions
East Africa is already a global leader in mobile payments, while mobile money accounts in sub-Saharan Africa are on an upward charge. Apart from being able to leapfrog the limitations and costs of physical infrastructure, the continent stands to benefit from having the youngest, tech-savvy workforce in the world in the next decade.
Africa's working-age population is expected to grow by 450 million people by 2035, according to the World Bank, and the continent is projected to have the largest working population of 1.1 billion by 2034, notes the World Economic Forum on Africa. Recent GSMA data shows that mobile money accounts in sub-Saharan Africa were up 18.4 percent between 2016 and 2017 to 33.8 million registered accounts.
However, we can't wait 12-15 years before adequate job-creating initiatives and policies are unlocked. The answer lies in harnessing the power of the digital economy to create African solutions for African problems. An important part of this will require promoting and partnering with African innovators to unlock sustainable growth.
We are already witnessing the significant potential of digital innovation in the remittance and mobile-wallet space. Penetration of smartphones is expected to hit at least the 50 percent mark in 2020 from only 2 percent in 2010, according to the World Economic Forum, offering the continent a clean canvas for tech-based innovation. It is an opportunity we must not miss. These are exciting times and are forcing us to think differently to come up with true pan-African innovation and development.
MFS Africa is a good example of how carefully harnessed and supported technological innovation can have ripple effects through the continent. It now operates the largest digital payments network in Africa and connects more than 170 million mobile wallets through 100-plus partners, including Airtel, Ecobank, MTN, Orange and Vodafone, across 55 markets. It has about 15 percent of the African population connected to a platform.
M-Pesa, launched in Kenya in 2007, is an often-touted example of African technology making waves even outside its own borders.
After capturing the local market for cash transfers, it has spread to three continents and 10 countries.
MicroEnsure, meanwhile, continues on the path of developing pioneering insurance solutions for low-income people like micro-health, crop and mobile insurance. These are solutions directly aimed at emerging customers, and it is little surprise that the company continues luring new customers by cleverly partnering with telcos.
Access.mobile is another major success story, testing and growing its health innovation offerings for seven years in East Africa. The company works with health systems to hone their communications with lower-income patients and also in growing areas, and hopped the pond in the opposite direction from most smaller start-ups and landed one of its first American clients.
Adventist Health White Memorial Hospital, a Los Angeles facility that works largely with lower-income Hispanics, was looking for ways to use health data to achieve better outcomes within its population. These are examples of the role models that will inspire our next generation of innovators.
The future is bright for Africa as innovation continues to drive change across the continent, disrupts industries and replaces legacy technology.
Nnamdi Oranye is a fintech author and international remittances lead at Standard Bank Group.
The views and expressions are not necessarily that of Independent Media.