THIS WEEK, THE media reported that the Bank of Namibia stated unequivocally that banks should focus on fintech, and roll it out across the nation so that Namibians could bank more easily and to create more financial inclusion.
This was absolute music to my ears, and something that has come up time and again.
Across the world there are payment applications, e-banking solutions, and ways for the ‘unbanked’ to be able to hold, receive and send money, as well as buy and sell products or services.
However, many people still think cash is king.
Money is dangerous, it’s bulky, smelly, and dirty, and with Covid-19, there’s a whole new issue to worry about.
How long do traces of the virus stay on cash?
Processing and getting money from a shop, restaurant, café or any other place of business to the bank, is often a security risk.
In the year 2021 handling cash really isn’t and shouldn’t be necessary, and should actually be avoided.
There are countless cashless payment solutions with the fintech sector constantly innovating.
This innovation has taken on a greater sense of urgency with Covid-19 – nobody wants to touch cash any more.
If you look at your phone, you may already have access to some cashless forms of payment, such as Paypal, but even your banking app or money-transferring SMS solution is a form of fintech.
Banks should be at the forefront of this revolution.
What we are seeing across the world, and especially in Africa, is the evolution of microtransactions and payments – ways in which people can pay for goods and services using their phones and never actually having to use physical money.
Sometimes these forms of transactions don’t even require the person to have a bank account.
This allows the hundreds of millions of people who are unbanked to start taking part in the economy.
Imagine being able to buy a watermelon from a street vendor or a vetkoek without any cash being exchanged.
A few taps and swipes on your phone completes the financial transaction.
Life would become so much safer across Namibia.
Most people would be very surprised to know that when it comes to fintech, the centre of the world is not the United States or Europe, but Africa.
There are several reasons why fintech is so big and is developing rapidly in Africa, and Namibia really needs to focus on being part of this development.
Mobile money application adoption in sub-Saharan Africa is truly spectacular.
This is partly because of the leapfrogging phenomenon, where people in the developing world leap over obsolete technologies and straight onto the latest tech.
But in the case of fintech in Africa, it’s also because the cost of mobile phones has dropped rapidly over the last couple of years, creating a boom in ownership.
According to estimates, ownership is set to rise exponentially, which is good news for consumers and businesses. By 2020, 634 million people in Africa had a mobile phone subscription – that’s 52% of Africans.
Now, with access to mobile money and mobile banking, it is not inconceivable that traditional banks will be left floundering, unless they embrace fintech in the same way as start-ups have.
No wonder the Bank of Namibia is calling on Namibian-based banks to embrace fintech.
We often think everything from overseas is amazing and innovative, and forget we have our own brilliant people on this continent. Africans are finding solutions to assist the unbanked and to suit our lifestyles and infrastructure.
The unbanked face huge challenges in accessing utilities, services and the basics of life. Will the banks in Namibia rise to the challenge?
Fintech empowers the disadvantaged, and in Kenya, M-Pesa was a revelation in 2007.
It enabled people, including whole communities, who never had a bank account to send and receive money, to pay for essentials like heating, water and lighting, and start businesses.
Fintech in Africa is one of the world’s greatest tech-success stories, and we must build on this success. So far in Namibia payment solutions and tentative steps are being taken by companies, but we need to be bolder as a nation.
The potential is huge, and Namibia can lead by example.
Imagine concluding a financial traction and not immediately having to sanitise your hands.
Fintech can make it happen.
The Bank of Namibia is asking banks to take the lead in this, and together with the bright minds we have, a secure and easily accessible and usable form can be made available in the short term.