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European Startups Enabling Financial Inclusion - Insights from the webinar

View the presentation deck here.

1.       Evolution of financial inclusion space

·         Post-Grameen era: people may have had more cash thanks to lending, but no way to digitize or mobilize the money beyond cash

·         Highlights Safaricom’s MPesa as leading to the birth of large scale technology impact

·         2014: emergence of digital wallet

o   Ex: China à can use WeChat and Alipay to make payments at hair salon or restaurant (many steps ahead of Africa)

o   Ex: India à demonetization gives boost to mobile money. Smaller merchants accept digital money

·         Interoperability: extending services to enable switching btw. telcos or interfaces.

o   Often it seems services are built out to gain traction in terms of numbers of subscribers. Example: Safaricom used MPesa to get subscribers into their network and it has been hugely profitable for Safaricom

o   Example: four telcos in Tanzania à have experimented around interoperability and networks like Visa and Mastercard have vested interested in that process

o   Developing switches and creating industry standards for interoperability needs to be prioritized

2.       FinTech Forum’s role

·         FinTech Forum stats: have analyzed 86 European startups à 50% of which are focused on financing (lending, crowdfunding, credit scoring and other supporting services)

o   Goal is to create a map of financial inclusion startups in Europe (majority are based in the UK, followed by Germany and the Netherlands)

·         Next Steps: report covering the “fintech” landscape in Europe will be published by the end of November 2017

o   Have interviewed startups that are scaling, investors and other partners (such as telcos and FIs)

o   What challenges/opportunities are the startups addressing?

o   Findings: most are focusing on evolution, not revolution. Offering small improvements rather than disrupting the game entirely

o   Most are focused on Europe or US based business

o   Proposed conclusion: there is a huge opportunity in emerging markets to really define the financial inclusion movement

3.       Five profiled startups:

·         Awamo: started serving MFIs in Uganda, funding was friends and family, 2nd funding round of $2 million, of which half was supported by DEG and the other half came from private investors

·         TagPay: French company funded to provide financial services in Africa

·         IDFinance: funding source = development finance

·         Mambu: started as Portuguese research project. Light, low-cost software lending platform. Have been funded by government grants followed by investments from private investors

·         KreditTech: raise more than $120 million so far, $110 was private investments