Regulatory key for the growth of the African FinTech sector-New study-FinTech
Regulatory key for the growth of the African FinTech sector-New study-FinTech
According to the results of a study by AfriWise, Kenya, Nigeria and South Africa have the most developed fintech ecosystems in the continent. The study names early regulation as one of the reasons for the success of the industry in these countries.
regulated fintech ecosystems attract investors
to explain the key role that the regulation for the growth of the FinTech sector played in these three countries, Learn Conditions:
The connection between regulation and a flourishing fintech sector is an important one. It is no coincidence that investors and companies in the FinTech area are attracted to the financial supervision of markets with more robust ecosystems. This is one of the reasons why the financing is still concentrated on a few markets.
In fact, the three countries are "are" recognized as the four fintech hubs in Africa Ensure 80 % of the remedial procurement in 2020. “
meaning of regulation
In contrast, investors from African countries have stayed away in which there are no regulatory ecosystems for fintechs. As explained in the report, "the lack of robust regulations can expose both end users and fintech service providers to a variety of risks". Such risks, in turn, prevent investors from founding business.In addition to the lack of FinTech regulation systems, the study also notes that in general "not sufficient funds for state training or institutions are provided in order to address regulations for new and constantly developing sectors". As a result, the supervisory authorities often lack the resources in order not only to fintech, but also "cross -border business for financial service providers".
In order to master these and other challenges, the study Fintech start-ups encourages "to work directly with the supervisory authorities, to build up relationships and to ensure that they keep pounding with the constantly developing regulation". This in turn is allegedly ensuring that all new regulatory framework for FinTech leads to the growth of the industry.
Do you agree that the lack of regulation hinder the growth of the fintech industry in many countries? Tell us your opinion in the comment area below.
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