Fintechs as drivers of major financial products in Kenya

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Fintechs as drivers of major financial products in Kenya


Summary

  • Kenya has seen steady growth in financial technology (fintech), making us the hub of fintech robustness in Africa.
  • New fintech companies are launched almost every passing month, offering a range of innovative financial services in areas such as banking, payments, loans, SACCOs and personal finance.
  • The government of Kenya has put in place regulatory frameworks that favor the concentration of fintechs in the country.

There is more value in having multiple perspectives than having tunnel vision. The corona outbreak has so far been the biggest disruptor to global trade and investment in the past 50 years.

Corona acted as a catalyst for global resilience. We are so hardened by external shocks that terrorist attacks, extreme weather, climate change, civil wars, religious extremism, stock market losses, inflation… are all on the back burner.

It is under this dark veil of the epidemic that the “pearl and white teeth” of global resilience shone even brighter.

In the shadow of the crown, an experimental mRNA-based HIV vaccine — the same platform technology used in two highly effective COVID-19 vaccines — shows promise in mice and nonhuman primates, researchers say. scientists from the National Institute of Allergy and Infectious Diseases.

This groundbreaking development comes after nearly four decades of global research.

Productivity islands are not limited to the medical world, there have also been game-changing developments in the financial sector.

Kenya has seen steady growth in financial technology (fintech), making us the hub of fintech robustness in Africa.

Our fintechs have revolutionized the way financial services are delivered to consumers and businesses.

New fintech companies are launched almost every passing month, offering a range of innovative financial services in areas such as banking, payments, loans, SACCOs and personal finance. The Kenyan fintech space is a diverse and ever-changing competitive landscape.

The government of Kenya has put in place regulatory frameworks that favor the concentration of fintechs in the country. To this extent, the President has approved the Central Bank of Kenya (Amendment) Act 2021; the amendment grants the Central Bank of Kenya the power to license and oversee previously unregulated digital credit lenders.

The bill’s assent has opened space for market and product development that will allow fintech to scale to the levels of multiple financial service providers.

Several fintechs seek to partner with established financial ecosystems such as banks/SACCOs, insurances, Saccos and micro-finance institutions as more or less equal partners, as opposed to fintech which is only a facet of the ecosystem facing customers.

These strategic partnerships are at the heart of various cutting-edge fintech products and services. Such partnerships, especially with a Bank/SACCO or Neo-Banking-as-a-service (BaaS) service provider, will remain a viable and attractive solution in the short term for Fintechs looking to get up and running and a excellent entry strategy for international financial institutions. establish a footprint in the country through technology transfers.

The notable benefits of these partnerships can eliminate unnecessary duplicities, and as such a Bank/Sacco partnership can exempt the fintech from certain barriers to entry such as minimum capitalization requirements, money transfer fees, regulatory and licensing requirements, while allowing fintech to focus on customer acquisition, user experience, and technology-assisted transactions.

The compromise for fintech comes in the form of a Bank/SACCO partner ensuring compliance with various compliance and risk management practices, including requirements applicable to the Bank/SACCO. Technically, the partner fintech will be held to the same level of due diligence as the partner bank/SACCO.

Kenya ranks among other African countries, with a level of access to formal financial services of 83.7% in 2021 (FinAcess Household Survey). Banks/SACCOs and Fintechs are in competition, but as we examine the drivers, challenges and opportunities of the financial services sector, it is increasingly clear that they should all be sitting on the same side of the table .

To this end, innovative banks/SACCOs have partnered with Fintechs, especially on mobile wallet solutions. A notable example is the MPESA partnership with NCBDA and Kenya Commercial Bank/SACCO’s.

Equity Group Holdings has launched its own fintech subsidiary, Finserve, signaling a future defined by disruptive innovation beyond the Group’s current financial services.

The agility and innovation of Fintechs promise financial engineering that would negate the effects of climate change through in-depth coverage of all dimensions of financial inclusion such as the inclusion of sustainable finance (green finance)

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