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Fintech lets you say no to cash

Fintech lets you say no to cash

By Llewellyn le Hané

Money is dangerous, it’s bulky, smelly, dirty. Processing and getting the money from a shop, restaurant, café or any other place of business to the bank so it can be deposited can be a security nightmare and leaves business owners looking over their shoulder.

In the year 2019, handling cash money really isn’t and shouldn’t be necessary. There are countless payment solutions. There’s cards to swipe, there’s cards that allow you to pay with credit, debit and you probably have one or two store cards as well. These are all forms of cashless payment solutions, however the fintech sector continues to develop and innovate.

If you look at your phone, you may already have some cashless forms of payment on there like Paypal, but even your banking app or money transferring SMS solution is a form of fintech.

What we are seeing across the world and especially in Africa is the (r)evolution of microtransactions and payments. Ways in which people can pay for goods and services using their phones and not handling physical money. Sometimes these forms of transactions don’t even require the person to have a bank account. Thereby allowing potentially the hundreds of millions of people that are unbanked to start taking part in the economy.

Most people would be very surprised to know that when it comes to fintech, the centre of the world is not the USA or Europe, it’s Africa. There several reasons why fintech is so big and developing so quickly in Africa, and Namibia really needs to focus on being part of this development. The investment and innovation in fintech and the people who embrace it and the companies that create it, are a positive driving force behind change in Africa.

Mobile banking is here to stay.

Mobile money application adoption in sub-Saharan Africa is truly spectacular. 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. There are more people with mobile money accounts than people with physical bank accounts. This is quite something to wrap your head a round and it has left normal bricks and mortar banks struggling to keep up.

According to estimates, ownership is set to rise exponentially, which is good news for consumers and businesses. By 2020, 634 million people in Africa will have 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.

All these mobile owners with fintech money accounts, plus the huge untapped potential inherent in Africa’s young population reaching maturity, are driving a new and exciting boom in tech startups.

This has led to huge investments in start-ups right here on the continent with eye-watering amounts being pledged to develop fintech solutions that are tailor-made for the African market. Investors across the world are beginning to wake up to the potential in Africa and not only does that mean big wins for the startups, but positive change for people across the continent. Fintech companies that have benefitted from these investments include; Cellulant which raised $47.5 million last year in its Series C round, and in 2017, Lagos-based fintech, Flutterwave raised $10 million in its Series A round.

We often think everything from the West is amazing and innovative and forget that we have our own brilliant people on this continent. Africans are finding solutions to assist the unbanked. The unbanked face huge challenges in accessing utilities, services and the basics of life. But they also face the security risk of carrying around lots of cash.

Fintech empowers the disadvantaged, and in Kenya, in 2007, M-Pesa was a revelation. It enabled people, including whole communities, who had never had a bank account to send and receive money; pay for essentials like heating, water and lighting, and start new businesses. Imagine if you don’t have to pay cash in taxi anymore, or if you can pay in your local bar, restaurant or even when buying kapana or fruits at the local market stall. Life would become so much safer across Namibia.

Fintech in Africa is one of the world’s greatest tech-success stories and we must build on this success. So far in Namibia there are some payment solutions and tentative steps are being taken by companies, but we need to be bold as a nation and the public and private sector including banking need to embrace fintech. The potential is huge, Namibia can lead by example. By 2050 it’s estimated that the youth population will have increased by 50% and Africa will have largest number of young people on the planet. The youth will want, need and start developing fintech applications themselves, if they are not already in place. Let’s create the fintech future together now!


 

About The Author

Guest Contributor

A Guest Contributor is any of a number of experts who contribute articles and columns under their own respective names. They are regarded as authorities in their disciplines, and their work is usually published with limited editing only. They may also contribute to other publications. - Ed.

Following reverse listing, public can now acquire shareholding in Paratus Namibia

Promotion

20 February 2020, Windhoek, Namibia: Paratus Namibia Holdings (PNH) was founded as Nimbus Infrastructure Limited (“Nimbus”), Namibia’s first Capital Pool Company listed on the Namibian Stock Exchange (“NSX”).

Although targeting an initial capital raising of N$300 million, Nimbus nonetheless managed to secure funding to the value of N$98 million through its CPC listing. With a mandate to invest in ICT infrastructure in sub-Sahara Africa, it concluded management agreements with financial partner Cirrus and technology partner, Paratus Telecommunications (Pty) Ltd (“Paratus Namibia”).

Paratus Namibia Managing Director, Andrew Hall

Its first investment was placed in Paratus Namibia, a fully licensed communications operator in Namibia under regulation of the Communications Regulatory Authority of Namibia (CRAN). Nimbus has since been able to increase its capital asset base to close to N$500 million over the past two years.

In order to streamline further investment and to avoid duplicating potential ICT projects in the market between Nimbus and Paratus Namibia, it was decided to consolidate the operations.

Publishing various circulars to shareholders, Nimbus took up a 100% shareholding stake in Paratus Namibia in 2019 and proceeded to apply to have its name changed to Paratus Namibia Holdings with a consolidated board structure to ensure streamlined operations between the capital holdings and the operational arm of the business.

This transaction was approved by the Competitions Commission as well as CRAN, following all the relevant regulatory approvals as well as the necessary requirements in terms of corporate governance structures.

Paratus Namibia has evolved as a fully comprehensive communications operator in Namibia and operates as the head office of the Paratus Group in Africa. Paratus has established a pan-African footprint with operations in six African countries, being: Angola, Botswana, Mozambique, Namibia, South Africa and Zambia.

The group has achieved many successes over the years of which more recently includes the building of the Trans-Kalahari Fibre (TKF) project, which connects from the West Africa Cable System (WACS) eastward through Namibia to Botswana and onward to Johannesburg. The TKF also extends northward through Zambia to connect to Dar es Salaam in Tanzania, which made Paratus the first operator to connect the west and east coast of Africa under one Autonomous System Number (ASN).

This means that Paratus is now “exporting” internet capacity to landlocked countries such as Zambia, Botswana, the DRC with more countries to be targeted, and through its extensive African network, Paratus is well-positioned to expand the network even further into emerging ICT territories.

PNH as a fully-listed entity on the NSX, is therefore now the 100% shareholder of Paratus Namibia thereby becoming a public company. PNH is ready to invest in the future of the ICT environment in Namibia. The public is therefore invited and welcome to acquire shares in Paratus Namibia Holdings by speaking to a local stockbroker registered with the NSX. The future is bright, and the opportunities are endless.