Fintech sustainability in Africa- the impact of Corporate Governance and Regulations

AfricaNenda, Africa Fintech Network (AFN), Africa Fintech Forum and Making Finance Work for Africa (MFW4A) are organizing an event on “Fintech sustainability in Africa- the impact of Corporate Governance and Regulations”. Registration Link: https://afdb.zoom.us/webinar/register/WN_2Ri6rVYeSEantOg8W5RzlQ#/registration Fintech is an emerging technology making waves across the globe. It refers to the use of financial technology to provide new channels of financial services. According to a McKinsey analysis, about half of the new technological start-ups created between 2020 and 2021 in Africa are Fintechs. Fintechs have already made significant inroads into the market, with estimated revenues of around $4 billion to $6 billion in 2020 and average penetration levels of between 3 and 5 percent (excluding South Africa). This shows the impact and revenue generation of these emerging technologies in African markets. Amidst the eruption and disruptions caused by fintech in the continent, there are inherent risks ranging from weak institutional arrangements, especially in start-ups, to concerns about consumer protection, cybersecurity, money laundering, etc. Regulations have generally continued to play catch-up with the related technological innovations thereby compounding the risks inherent in the sector. These risks have no doubt weighed heavily against the level of investments needed to support the sustainable growth of the African fintech ecosystem. In Particular;

• Younger and private fintech enterprises often lack the financial strength necessary to attract new clients and partners.
• Alignment of new governance practices with fintech enterprises to sustain the evolution of the fintech enterprises.
•  Regulatory requirements across multiple jurisdictions, especially international client bases, a proper governance support should be available for this new type of organizational environment.
• Innovative solutions around risk and regulation mandates where governance support should be available to guide the fintech enterprises.
• Lack of governance mechanisms for implementation of new technologies—Because fintech enterprises are oriented toward implementing cutting-edge technologies to produce innovative solutions, they need to have suitable governance processes in place to implement such technologies and roll out state-of-the-art solutions.

Hence, the webinar’s objective is to identify some of the main corporate governance challenges fintech faces from seed stages to maturity, with the main goal to provide a set of policy considerations for policymakers and industry players to develop coherent frameworks and policy approaches toward FinTech firms that unlock innovation and competition and develop products and services that are compatible with the key objectives of inclusive finance, consumer protection, and market integrity.’ Thank you,