According to KPMG, one of the four largest audit and accounting firms in the world, 2021 was a record year for fintech investment in Africa, and the momentum is only likely to increase.
“To understand the impact of FinTech on industries around the globe,” says founder and CEO of FinTech company ProfitShare Partners Andrew Maren, “we note that the tech industry ecosystem is active across a broad range of sectors, in particular personal finance management, payments, lending, wealth technology (WealthTech), insurance technology (InsurTech) and more.”
Maren says that payment systems and capital providers are the Fintechs that seem to be making their mark rapidly in South Africa. “The reasons for this are many, but these companies are making a difference to the small and medium-sized enterprise (SMME) sector, on which South Africa’s growth is largely dependent.”
By their very nature, Maren adds, FinTechs are nimble, offer easy access to their services and usually respond rapidly. “This gives SMMEs a chance, where larger and more cumbersome organisations take valuable time – which small businesses don’t have – to respond to market opportunities.”
Disruption and growth in Africa
Africa is the world’s second-largest and second-most-populous continent, after Asia. With cross-border trade and payments often presenting issues for both businesses and individuals, FinTech has stepped into the payment space and made it simple for anyone with a mobile device to pay almost anywhere across our vast continent, Maren points out.
“The same goes for InsurTech, where small business shipping products around the world have access to insurance immediately. The industry has been disrupted by the technology, ultimately for the good of the people using their services,” he says.
“With ProfitShare Partners, disruption has come in the form of a solution for SMMEs who are given an order and an opportunity to step up and fulfil it, resulting in both income and company growth. For those who qualify, PSP is online, makes the capital available quickly and the small business can meet the requirements of the purchaser.”
This “disruption” has brought much value and opportunity to a small operation that may not have been able to take on a large order but now has its foot in the door.
Says Maren: “As technology changes and brings more value to the little guys, we are driving the chance for large corporates to assist in growing the economy by giving orders to small businesses, knowing they have the backing to fulfil the orders and meet corporates’ requirements.”