Your Curated Weekly Tech News Across Africa, 14th December 2023

Pivo, a Nigerian fintech startup that garnered attention with its mission to provide banking services to small supply chain businesses, is reportedly shutting down merely one year after securing a $2 million seed round. Despite its initial success in lending and business banking, having dispersed over $3 million in loans and processed more than $4 million in transactions annually, Pivo's closure is indicative of a troubling trend in the African startup ecosystem, marked by over a dozen closures this year.

The Nigerian fintech industry confronts numerous challenges, including rapidly evolving and unclear regulations, licensing difficulties, limited access to reliable and affordable internet, unstable power supply, low financial literacy, constrained investment funds, high interest rates, and a shortage of foreign exchange. Data security poses an additional challenge, given the prevalent cybercrime and the absence of robust data protection laws.

To overcome these challenges and cultivate industry growth, a set of recommendations are emerging. These include advocating for policy changes, garnering investor support, prioritizing the establishment of trust through secure offerings, robust data protection, and excellent customer support. Additionally, promoting financial inclusion and encouraging collaboration among government entities, regulators, fintech companies, investors, and development organizations is crucial.?

More on this story: Pivo is shutting down

Kenya is set to implement taxation on cryptocurrency trading following the approval of the Capital Markets (Amendment) Bill by the National Assembly's Finance and National Planning Committee. The bill seeks to introduce taxes on crypto exchanges and digital wallets, along with imposing transaction levies akin to excise duty on bank transactions. Additionally, the proposed amendment aims to redefine securities in the Capital Markets Act, Cap 485, to encompass digital currencies.?

These changes are designed to establish governance and oversight in the rapidly expanding cryptocurrency sector, safeguarding citizens from potential risks. The Bill also mandates individuals involved in digital currency transactions to furnish information to the Capital Markets Authority- Kenya (CMA) for taxation purposes.

This is going to be an interesting one and players in the ecosystem are following this keenly. One key challenge would be to identify Kenyans who use decentralized platforms as those remain anonymous as opposed to centralized ones like Binance .

More on this story: Kenya set to tax crypto trading?

The @Financial Sector Conduct Authority of South Africa is exploring the possibility of mandating crypto companies headquartered abroad to establish a local office. A recent market study has highlighted Cape Town as the primary location for head offices, with Johannesburg following closely at 33% and Pretoria at 7%. The objective of this study is to gather insights into the crypto asset industry to inform the development of enhanced regulatory measures.

South Africa boasts the highest number of crypto asset users in the region, with more than half of the providers focusing on retail customers. Among Crypto Asset Financial Service Providers (FSPs), the predominant revenue stream is trading fees (38%), followed by administration and advice fees (20%). Approximately 10% generate income from both regulated and unregulated financial services.

Unlicensed firms face the risk of closure by the end of the year. This regulatory development reflects South Africa's proactive approach to managing the growth and operation of the crypto asset industry within its borders.

More on this story: South Africa doubles down on crypto regulation

Nairobi-based insuretech startup Bluewave is maintaining its independence following the collapse of its planned acquisition by another Kenyan insuretech platform Lami. Despite an initial strategic non-exclusive partnership that granted Lami Global a two-year license to utilize Bluewave's technology, the collaboration has now concluded, and Bluewave stands as a self-sufficient entity.

While Lami, backed by substantial funding, continues its growth trajectory, Bluewave is charting a course for a strategic relaunch and regional expansion within Africa. The company is actively refining its processes, products, and partnerships, with a specific focus on introducing its innovative solutions in key markets such as Uganda, Nigeria, Ethiopia, Malawi, DRC, Tanzania, Rwanda, and Zambia.

More on this story: Lami's acquisition of Bluewave collapses

Businessman Rutenhuro Moyo is set to make a substantial investment of $420,000 in Jamboo, a fintech start-up focused on delivering digital banking and investment services tailored for African expatriates residing in the UK and Europe. Drawing on his extensive background in senior roles at renowned international corporations such as Anglo-American, Old Mutual, and Coca-Cola Central Africa, Moyo is dedicated to catalyzing positive change and contributing to economic development.

This strategic collaboration between Moyo and Jamboo is poised to transform Zimbabwe‘s financial services, introducing a new era of innovation, accessibility, and empowerment for the African diaspora in the UK and Europe.

More on this story: Zim Tycoon invests in Fintech ?