I saw a really interesting presentation in Kigali at the Dot Finance Africa FinTech Summit, from Yasaman Hadjibashi, chief creation officer with Barclays Africa (soon to be something else). She began with a discussion of the makeup of Africa:
- By 2050, it is expected that the population will double from 1.2 billion to 2.4 billion people.
- The average African is just 19.5 years old.
- Two out of three adult Africans have no access to banking.
- 6% have formal credit access and 16% formal savings access.
In Sub-Saharan Africa:
- One in four adults can’t read.
- 182 million adults are unable to read and write (23% of population).
- 48 million youths (ages 15-24) are illiterate (22%).
- 30 million primary aged children aren’t in school (22%).
These populations are being served by mobile:
- Three out of four Africans have a mobile phone.
- 45% have a mobile money account.
- Airtel, Tigo and MTN are all winning, with services from tap-and-go contactless payments to mobile loans and savings.
What I find interesting is that banks are ignoring the opportunity to get into the mobile ecosystem and, in doing so, they’re messing up. These mobile network operators (MNOs) will upscale over time to offer full bank services. They will either do that in partnership with banks or at the banks’ expense. This means that banks must open up and offer APIs that MNOs can plug-and-play into their network services. It’s the only way a bank can remain relevant, as 80% of Africa’s population moves into the mobile-money-enabled world.
Barclays may be one of these, though Yasaman didn’t explicitly say this. Nevertheless, she did put up this chart, which shows the modern African lifestyle:
It’s a nice chart and shows how rapidly life is changing. To be part of this, Barclays has one of its incubation accelerators – called Rise – based in Cape Town (the others are in New York, London, Manchester, Vilnius, Tel Aviv and Mumbai). There, they are focused on a number of co-creation projects. including:
- Open banking with Howler and The Sun Exchange.
- Payments with Fomo Travel, FlexPay and ByteMoney.
- Big data with Spatial Edge.
- Blockchain with Avenews-GT.
- AI and machine learning with Abe.Ai and Kapitalwise.
- Insurtech with eCOIDA.
Hopefully, that will develop into more interesting projects, with Yasaman concluding around some case studies of what Barclays is doing in co-creation projects in Africa.
The first is to address lending by using a new lending model designed for millennials. Half of Africans under the age of 30 are declined credit because they have no credit history. In response to this, Barclays Africa is working with Hello Soda (“We unlock the valuable information contained inside social and unstructured data”) and Social Lender (“microcredit based on social reputation”) to offer loans based on your Facebook and other social profiles.
In most African countries where people have access to the internet (27.7% of the population right now) – where they have access, one in three Africans (9.3% of the total population) actively use Facebook, so this makes sense in that people with no financial history can at least get a loan possibility through having a social history.
The second case study is Barclays partnering with Asoriba in Ghana. Startup company Asoriba has developed a mobile app that allows churches to manage, engage and connect as a kind of Facebook for church members and leaders. Think about it as a customer relationship management (CRM) tool for church leaders to manage the church easily and effectively. Through the app, they can get content from services, information about events, and donate and pay tithes and offerings. Christians normally give a tenth of their monthly income to the church, and that’s the piece where Barclays and Asoriba have been working together in Ghana, and now in South Africa.
All in all, the insights gained from Yasaman’s presentation provided a great kick-off to the Dot Finance event, and I really enjoyed it.
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– This article is reproduced with kind permission. Some minor changes have been made to reflect BankNXT style considerations. Read more here. Photo by Chris Warham, Shutterstock.com