Vice President Dr Mahamadu Bawumia, says Ghana and Rwanda are leading the way in developing a favourable environment for fintech start-ups in Africa.
He noted that start-ups and investors were mindful to commit resources to African markets since the regulatory framework is unfavourable for businesses in the financial ecosystem to thrive.
“Countries such as Ghana and Rwanda have made significant strides by implementing a proactive regulatory framework to help start-ups in the fintech space to evaluate their services before rolling out,” he said.
The Vice President said this on the second day of the 3i Africa Summit 2024 in Accra, where more than 6,000 attendees from 95 countries have converged to unlock Africa’s FinTech and digital economic potential.
He explained that Ghana and Rwanda are creating an ideal environment for fintech start-ups through the introduction of regulatory sign boxes, which has allowed fintech companies to experiment with their businesses without fear of regulatory consequences.
According to Dr. Bawumia, the adoption of regulatory sign boxes in these two countries has helped start-ups get significant insights into their respective countries’ requirements.
He said that sign boxes provided regulators with insight into modern technology and innovation, while fintech start-ups used sign boxes to analyze their concepts, refine their offers, and demonstrate their value propositions to potential investors.
Dr. Bawumia emphasised the importance of collaboration between fintech companies and telecommunications providers in promoting financial inclusion and driving
growth across Africa.
“How many African countries have an individualised credit scoring system? Credit scoring does not exist in over 90 per cent of African countries. How do we do credit scoring in the absence of a unique identity for the populations?
“How do we have a credit score where most of the population is excluded from the financial system? For us, the role of fintech in credit scoring will be key because traditional credit scoring fails that basic model,” he noted.
The Vice President observed that most of Africa’s population had mobile money accounts rather than bank accounts, which has served as a firm foundation for the continent’s credit rating system.
He said the fintech industryhad also created access to financial services in the rural parts of the continent.
“In Ghana, the Central Bank will leverage mobile money accounts, Ghana Card, and other data bases to provide credit scores to the population,” he said.
Source: GNA