Africa is a “fertile ground” for new fintech services, although more needs to be done to improve financial and technical skills of young people on the continent, according to Africa Nkosi, marketing manager of business solutions provider Khonology.
The fintech sector across Africa is currently booming, with young people creating innovative new tech products which address local issues, says Nkosi.
He says the success of companies such as 22Seven, Snap Scan, and Ikhokha, shows there are ample opportunities for young people to innovate and succeed in the fintech space. The size of Africa’s un-, or under-,served markets also further expands the opportunity the fintech sector poses.
“We need to keep driving this innovation and look to disrupt and do things efficiently and effectively. Africa is a fertile ground for new fintech services which are leveraging the power of communities and social media to make financial services more relevant. The largest market in Africa is unserved, an estimated 330 million adult Africans lack access to formal financial services,” Nkosi says.
However, Nkosi argues financial knowledge is lacking in Africa, and this hinders collaboration and innovation between corporate players, local markets, and the education sector.
He says financial and technical skills training needs to be improved, in order to unlock the potential of Africa’s fintech space.
“The lack of financial knowledge is one of the hindrances of bridging the gap between corporates, markets and the education sector. This is an issue that can be solved by introducing technology and finance across all subjects or modules, making sure that we understand how these factors integrate and impact the value chain in the economy,” he says.
According to Nkosi, financial literacy, technology, and economics should be made into compulsory subjects at all levels of education, from primary to university level.
“They are key drivers to ensuring that the future knows the fundamentals of being market makers and players,” he says.
This is not the first time Khonology as a company has attacked the quality of fintech skills on the continent. Disrupt Africa reported Michael Roberts, chief executive officer (CEO)of Khonology, claimed that South Africa lacks the skills, training, and financial literacy to be an active player in the pan-African fintech industry.
However, these claims are not reflected in recent Disrupt Africa research, which found that fintech startups across Africa raised over US$55 million investment in 2015, with South Africa performing particularly well, leading Africa’s fintech sector investment.