Financial Inclusion Through Fintech: How Mauritius Can Play An Even Greater Role For Africa
Published date | 03 October 2023 |
Subject Matter | Finance and Banking, Technology, Financial Services, Fin Tech |
Law Firm | Orison Legal |
Author | Janesh Chuttoo |
This article was published in Mauritius Finance Magazine, 6th Edition. A PDF copy is available to download here.
According to World Bank estimates, around 60% of adults in sub-Saharan Arica are unbanked. Lack of money, distance to the nearest financial institution and insufficient documentation are some of the major hurdles preventing these people from accessing banking services. However, with the advent of FinTech, Africans now have increased access to banking and financial services, albeit not in the traditional 'brick and mortar' way.
FinTech and financial inclusion
Financial inclusion refers to businesses and individuals having access to useful and affordable financial services that meet their needs. The adoption of financial technologies like mobile money has opened a plethora of possibilities for Africans in making or receiving digital payments, as well as saving money.
According to the latest Global Findex Report, FinTech has now become an important enabler of financial inclusion in Sub-Saharan Africa. According to a study conducted by the Boston Consulting Group, Africa's FinTech market is projected to reach USD 65 billion by 2030, representing a 13-fold increase over the 2022 market.
Role of Mauritius in advancing the African financial inclusion agenda
Over the last few years Mauritius has been actively positioning itself as the gateway for FinTech service providers looking to tap into the burgeoning African market. The Bank of Mauritius (BOM) and the Financial Services Commission (FSC) are the regulators that oversee the development, regulation and supervision of the FinTech services industry in Mauritius.
While the BOM supervises payment systems operators and payment service providers, the FSC is responsible for inter alia overseeing the activities of crowdfunding platforms, peer-to-peer lending operators and virtual asset service providers. This article focuses on the FinTech products that are regulated by the FSC and which are helping to enhance the financial inclusion agenda on the African continent.
Peer-to-Peer Lending
Peer-to-Peer (P2P) lending enables individuals or businesses to obtain loans directly from other individuals without going through a financial institution. While P2P lending is a relatively new concept in Africa, it has gained popularity in recent years as it is particularly attractive to small business owners and entrepreneurs who may not have the collateral or credit score required for traditional bank loans.
The Financial...
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