Africa faces seemingly insurmountable challenges. There are civil wars, terrorism, disease, drought, famine, and poverty. Yet, in the midst of all this lack, there is amazing potential for socio-economic recovery.
Mobile Phones are an Important Link
Mobile phones provide Africans with the only opportunity to stay in touch with friends and family, as well as to access important services. Decades ago, mobile communications companies began to invest in infrastructure in Africa, improving quality and expanding market reach. Therefore, no matter where you go in Africa today, you will see people with mobile phones. And, through the mobile phone, comes the greatest potential for reversing the cycle of poverty in Africa.
Mobile Phones Enable Cottage Industries
Innovation Africa is a non-profit working to bring much-needed services to rural populations in Africa. Its founder, Sivan Ya’ari shared a fascinating story about the genesis of her work and the surprising power of mobile phones to create economies. Speaking before a TEDx Talk audience, Ya’ari spoke about her efforts to bring electricity to a certain village. As the process was unfolding, she noticed that just about everyone had a mobile phone. The logical question, then, was how do the people charge their phones? Ya’ari learned that in a village not too far away, there was electricity. One villager had set up a charging hub. Everyone paid 10 cents to charge their phone. The mobile phone had become the foundation for a primitive, yet very successful micro-economy.
Fintech has Radically Altered the Financial World
As the prevalence of mobile device use spread across the world, along with a growing preference for online commerce, software developers had to respond with new technologies. Today, consumers can do just about everything online, including financial transactions. In Africa, where the mobile technology market was already in full swing, mobile-based financial services was a natural tool in the war against poverty.
The results are documented. Between 2008 and 2014, 2% of Kenyan citizens were able to move out of poverty because of access to fintech on their mobile devices. (businesslive.co.za ) And this is just one country. Early this year, a new initiative was begun by Above and Beyond Tech, an American-based global technology company, the Dutch Development Bank, and Arise, an African investment company. This initiative, called FinForward, will take digitized financial services into the next generation, vastly increasing access by Africa’s underserved communities.
Mobile-based Financial Services Enables Cashless Payments and Access to Financing
Mobile-based financial services make live normal. Africans with no access to a bank account also lack the ability to pay for even basic things such as bus transportation. But, with mobile fintech, they can pay for services, as well as apply for loans to start a small business.
M-PESA and M-Akiba are two examples of how mobile financial services is empowering Africans. M-PESA is a mobile-based money transfer technology. Users can access savings accounts and microloans. M-Akiba helps consumers move to the next level. Its fintech platform allows consumers to make investments. This is one of the clearest examples of mobile-based financial services creating sustainable economic recovery. With Mobile-based financial services Africans are fully empowered to change their lives and secure financial freedom.