Kitwe and Kwatcha

Mobile phones are the currency of commerce in Africa. No more so than in my hometown Kitwe on the Copperbelt.

The number of mobile money agents in Zambia increased from 23,000 in 2017 to 47,000 in 2018 and continue to show explosive growth. Mobile kwatcha transfers in the first three months of 2019 equaled more than the total sum of transactions made between 2012 and 2017.

More than 6 in 10 adult Africans have a mobile money account. The GSMA anticipates over 110 million new mobile money accounts before 2025. Barriers are breaking down. Mobile Money Operators are opening up the continent via inter-operable solutions such as Mowali (built on the Gates Foundation funded platform Mojaloop) allowing open-services to banks, money transfer operators and other financial services providers. Regulators are also easing up on the historic limits set on the number of companies offering mobile money services. All good.

Lending Enablers

But the real catalyst is enabling technologies. African financial service providers (FSPs) need to work with smart APIs and SDKs to advance their growing digital finance business. There is a $5.2 trillion finance gap affecting 200MM MSMEs across the emerging market. Smart enablers can effectively help bridge the gap between mobile money operators (MMOs) and the growing financial network.

Accelerating loans to agents, de-risking lenders and better managing float require technically challenging machine-learning services. The more companies that can provide a middle layer between enterprise developers and the incumbent banks and MMOs, the healthier the financial ecosystem will become. The more secure and smart these APIs and SDKs, the faster applications will spring up to services this growing marketplace.

(A good example of an enabler is www.pngme.com that scores, provisions and manages the liquidity of the expanding mobile money agents networks.)

We know that the micro-lending sector is key to regional growth. To expand, it is essential to provide a real-time predictive model based on the MSME's financial and behavioural data. Permission-based APIs that can thoroughly and seamlessly interrogate the mobile device's transactional records and use alternative data to create a complete creditworthy profile. Who will provide these plug-ins to advance FSPs' reach and liquidity?

As I look for opportunities over the next few years, I ask which company will be the next Plaid.com of Africa? Which company will succeed in making it easy for developers to plug-and-play functionality into services and applications without having to build them from the ground up.