Fintech (Financial Technology) innovation growth is currently aiding Kenya with wings to fly and soar. Fintech has been a major key factor in the growth of the country ever since the Covid-19 Pandemic hit. As most countries move past the economic downsides caused by the pandemic, Fintech has allowed for improvement in terms of financial access for the unbanked and underbanked.
The pandemic revealed and aggravated the financial inclusion space among the underprivileged lacking access to financial services with stats showing about 2 billion people worldwide who do not have access to financial institutions.
However, according to IFC ( International Finance Corporation), the growth of digital financial services in sub-Saharan Africa has led to a sharp rise in the number of people benefitting access to financial services in the region with almost half of Seven hundred million (700M) users worldwide.
The rise in the adoption of mobile tech is encouraging tech innovators to invent infrastructure that will serve the potential of changing how payments will be made forever.
The Central Bank of Kenya (CBK) in 2020 did a survey that showed digital and mobile innovations will play a key role in responding to the Covid-19 pandemic. This is coming to fruition as the demand for inexpensive and convenient financial services is on the rise across Africa and the globe.
From an end-user perspective, Fintech gives financial flexibility with the provision of substantial mobile payment solutions that makes the transfer of money or access to loans easier through mobile devices.
This sort of flexibility has remarkably reduced money handling costs like fees, interest rates on money transfers, as well as loans for small businesses making e-payment more affordable.
Fintechs are creating rapid solutions for building modern financial structures while large financial organizations like banks take a long time to get innovations into the market.
Licensing and regulation are important to safeguard consumer interests but also critical to the rapid rise of innovation. Fintechs especially are counting on the government to ease market entry and play the role of an enabler to some extent in doing business.
To encourage the growth of Fintech start-ups in a growing young economy like Kenya, motivation will aid the facilitation of steady undisrupted growth from early stages of most of these businesses.
Also, regulators such as CBK, Capital Markets Authority (CMA), and Communications Authority (CA) could provide unrestrictive policies that will enhance and make it easy for fintech start-ups to innovate and grow.
In addition, Fintechs should look into important partnerships to facilitate their growth, enhance their users’ experience and profitability. Hence, strategic allies between fintech, banks, and various payment gateways will create opportunities for competition in niche markets such as the payments solution space.
Being supportive of the growth of digital financial services, in the long run, will aid the unlocking of local market economic opportunities.
It thus will be appealing to see how the evolving process of innovations and solutions in Kenya will lead to a more digitize and inclusive economy for the country.