The African continent is poised to experience its next big growth phase on the back of financial technology (fintech).
That’s according to Karl Westvig, CEO of Retail Capital, who says Africa has long been a pioneering force in fintech, with Kenya’s MPesa showing the impact of combining mobile and financial technologies.
That legacy hasn’t slowed down. According to a report from Disrupt Africa, almost a third of funding raised by African startups in 2017 was in the fintech sector.
Retail Capital has seen its traditional SME-funding business made more efficient through digitising processes. But for Westvig, fintech is about more than simply digitising financial service processes.
“Our definition of fintech extends to building the digital rails which accommodate a seamless customer experience, from real-time application and approval to contracting electronically,” says Westvig. “Traditional lenders are improving processes by collecting and using data digitally and also automating processes, but unless they can do it at scale, in real-time with minimum fuss from the consumer, it isn’t really fintech.”
Retail Capital has applied this definition of fintech to its own partner model, which has seen it team up with payment players such as Yoco, iKhokha, and SureSwipe to provide integrated funding to their customers.
Doing so has allowed it to provide pre-approved offers, a realtime mobile application, a digital contract and same day disbursement. In addition, Westvig points out, the model allows SMEs applying for funding to have a contract in as little as 30 seconds.
On the back of this approach, Retail Capital has attracted funding from three development finance institutions (DFIs), at an average investment of between $2-million and $5-million per funder.