Wednesday, March 20, 2013
A financial revolution in Africa.
The Foreign Policy Centre is a UK-based, independent, progressive foreign affairs think tank. Participants typically are from political parties, private sector and academia. If an organization like this produces a document referring to the "Financial revolution in Africa", one can take it that some kind of revolution is happening. (Read and download here). Or when Killian Clifford write about the "Rising Africa" in his blog (Read here), then there must be something there. There is very little doubt by people in the industry as well as close observers that something amazing is happening in Africa with financial services, but why and what is next?
The biggest reason for the spectacular growth in mobile financial services is because there is a need and that it is possible to meet the need with technology that actually work. There is also a spirit of optimism and a willingness to try out things that one do not see as much in other places. The degree of rampant innovation is almost unheard of. Also a new breed of consumers are starting to emerge with an open mindset and with big dreams. These consumers embrace new innovations and what is being made available as far as financial services are concerned, is proof of this trend.
While Africa consist of more than fifty countries, there is a high degree of regional integration. Because of historical political instabilities many people have been displaced across borders, or have willingly moved. Members of the same families often live in different countries and trade is often conducted across borders. A common currency is being used in some countries in West Africa and many trade blocks are being established in the region. The next wave of financial innovation will cut across borders and will accelerate the revolution. We have seen nothing yet.