Fintech — The Gateway to Financial Inclusion in Cameroon
As the world evolves, new technologies and innovations are developed to make life comfortable and accessible. The financial sector is one of the fastest-growing sectors to embrace technology and there is a high need for financial stability in the world in general.
Fintech refers to digital innovations that improve the quality of financial services. FinTechs make use of new technology and innovation to develop new and better financial services. The fast growth of mobile technology, the internet, and mobile phones users are paving a way for fintech to provide financial inclusion in Cameroon.
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WHY FINTECH?
Let’s get an understanding of what financial inclusion is all about, before drawing conclusions on fintech as the gateway to financial inclusion in Cameroon. financial inclusion according to the World Bank is the ability of that individuals and businesses have access to useful and affordable financial products and services that meet their needs — transactions, payments, savings, credit, and insurance — delivered in a responsible and sustainable way. Financial inclusion is designed to give people who do not have access to basic financial services such as bank accounts, savings, credit, and other financial transactions.
The high cost of financial services, the distance of services and financial institutions, the long paperwork required to open an account, poor customer service, absence of guarantees and credit history, exclusion of women including young people have excluded a large part of the population from the financial system in Cameroon.
In Cameroon, just 10% of the population aged at least 15 had a bank account in 2017. This was revealed by the finance ministry (Minfi) in a “FinScope” survey, which aimed at assessing the levels of access to and use of financial services across the country. According to the document, financial inclusion is relatively low in Cameroon. Indeed, people widely preferred informal credit (11%) over formal credit (3%). In addition, about 10% of the population received credit from relatives or friends.
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“Consumer education and financial education are serious concerns in Cameroon, mainly in the insurance sector, where most adults lack financial literacy,” the study said. About 51% of adults surveyed pointed out the need for financial education training, mainly on how to save and the benefits of financial products. Meanwhile, 45% do not seek financial advice due to a lack of financial information.”Only 29% of those aged 15 and use mobile money service while the mobile penetration rate was 76%. This means the digital financial inclusion can still be improved. This is important because Mobile Money is a relatively new financial product with huge potential,” the FinScope mentioned.
As a solution, financial technology (fintech) offers the chance to boost economic growth and expand financial inclusion in Cameroon. Financial inclusion advocates methods such as the easy and inexpensive opening of a bank account, accessibility to financial products and institutions for all, financial education, and matching the needs of the population with financial products and services
FINTECH Startups/ Companies Trends
Mobile technology, one of the key elements of fintech in Cameroon, has enabled thousands of people to access financial transactions such as payments, money transfers, and account opening.
The adoption and use of mobile technology( Mobile Money/Mobile wallet) in the provision of financial services is changing the way in which financial service providers operate and deliver products and services to their customers. A report published by the Cameroonian ministry of posts and telecoms (Minpostel) showed significant growth in the country’s mobile penetration rate, which rose from around 12% in 2005 to almost 83% in 2016.
Cameroon’s Internet penetration rate was 35.64 percent in 2017, an increase of 2.39 percent in comparison with the previous year, according to a recent report by the Telecoms Regulatory Agency (ART).”This increase in Internet use is the result of the number of mobile phone subscribers, which is increasing, and the presence of companies offering Internet services, as well as the number of smartphones” ART explains.
The number of Internet subscribers in Cameroon, all categories combined (Wimax, mobile Internet, ADSL, and so on), increased by 2.39 percent in 2017. In absolute terms, 193,487 new subscribers were registered in one year. At this time, 8.27 million Cameroonians are connected to the Internet.
The rise of Mobile phone sales and internet expansion has led to FINTECH startups and mobile operator companies to render financial services to the un-banked, merchants, companies, under-aged etc. Amongst many Fintech startups/companies said to be in Cameroon only a few are seen to be making waves in Africa as a whole.
Orange Money Agents can the found in streets and local neighborhood
Orange and MTN have democratized mobile payments and remittances in Africa. They are the most used money banking service in Cameroon. These mobile operators introduce mobile money services in Cameroon in 2011 but did not only usher in a new way of life (as far as handling money is concerned) but also increased the rate of financial transactions. Besides, it has also brought the services and financial institutions closer to people, enabling access to financial services for all and at a lower cost.
Mobile money also serves as an electronic wallet for users as they no longer need to move along with physical cash. Users can buy fuel, do shopping in supermarkets, get drinks in bars and snacks amongst others and pay using mobile money. Enterprises and institutions like Electricity supply company (ENEO), General Directorate of Taxation, CAMRAIL amongst others are also taking advantage of the technological revolution to facilitate revenue collection. Today, it is easy to pay electricity bills via mobile money with the enterprise attending to several clients at a time than the hitherto long and tiring queues at their counters.
Softeller launched by IWOMI Technologies service headed by Famba Collins comprises of Outsourcing, Consultancy, Service Integration, Software development, Business Process Engineering, Training, IT Auditing, and Advisory. They also own a payment gateway including mobile money, through their online service www.softeller.com, on which they already have about 15 companies subscribed, with contracts signed. Their bulk SMS solution is also being used by a wide range of customers in Cameroon for notifications.
Wecashup entirely conceived by Cedric Atangana, CEO of Infinity Space is universal payment platform that aggregates different payment methods (cash, mobile money, wallets and bank cards, concurrency) via a single interface and a universal API. It allows people without cards or bank accounts to have easy access to online shopping, enables e-merchants to extend their deployment area and thus acquire new markets (Africa, a market that is hard to reach for e-merchants), enables secure transactions for both consumers and merchants. It is one of the fastest-growing fintech startups in Africa, have footprints in 36 African countries.
To find out more about WeCashUp or Infinity Space, go to Cédric ATANGANA via LinkedIn ( https://fr.linkedin.com/in/cedricatangana
AdwaPay developed by local fintech Adwa provides a mobile app that aggregates most of the digital payment solutions available in Cameroon namely, MTN Mobile Money, Orange Money, Express Union Mobile, bank cards and even PayPal. With the app, users can make various money transactions. AdwaPay guarantees transactions’ security since the startup subscribes to Digicert’s yearly cyber insurance package. This package offers $1.5 million in compensation for every single transaction. For more info go to www.adwapay.com
Founded in 2013 by Viola Llewellyn and Marvin Cole, Ovamba Solutions provides short-term capital to micro, small, and medium-sized businesses via mobile phone technology. It can lend amounts of up to US$500,000.The company is helping businesses grow through its innovations of a natural chatbot for African languages that surpasses the traditional banks. Ovamba has a voice and facial recognition security feature and a blockchain solution for investors to be onboarded to its funding platform. This company has been recognized as one of the World Economic Forum’s “Technology Pioneers”. This is one company we have to look out for in the future.www.ovamba.com
The local label for tontines (personal Savings) in Cameroon known as ‘’DJangui” is also the name chosen by Jules Guilain Kenfack, a Cameroonian to refer to the application he invented for people to manage tontines online. Djangui is an application where customers can securely pay for one’s contributions via Orange Money, MTN Mobile Money, and Paypal;using instant message service to exchange with members of the tontine ,organize automatic lotteries, take loan from the tontine’s account, vote for members of the board,have minutes of previous meeting through video call etc.
Even though the application is still in the development phase for more functions to be added, the application is being used in Germany by tontines with Cameroonian members living in Europe. This innovation will go a long way toward modernizing tontines which is a part of the African culture.www.ledjangui.com, https://www.facebook.com/djanguicameroon
WAZAPAY is another Cameroon fintech startup based in Molyko, Buea. It is an e-Wallet and an online payment gateway that allows users to securely make and receive payments through mobile phone over the internet.www.wazapay.net
Those are just a few examples of fintech companies/startups in Cameroon spotted to be creating names for themselves and taking the financial sector to the next level. Other Fintech startups such as Diool,Qwalet , monetbill, ZuumPay, Ishangoo, etc that still need to be given the chance to showcase their potentials
Why the phobia of Fintech
Even Though we can see a few fintech startups gaining grounds in Cameroon, they really have trouble making their way through the system. While some countries in the African continent are already on another level of the use of opening an account, insurance, and credit, Cameroon is still at the first stage which is the transfer and payment of money.
The reasons for such fear can’t be blamed solely on technological factors and lack of infrastructure rather the restraint and the not very glorious perception of the actors of the local finance and the population at large has a lot to play.
For example, local financiers believe that the fintech represent a danger to the still too weak banking system. They believe banks that associate with the fintech companies make a serious mistake.
Fintech startups do not provide enough information on what they offer. They don’t recognize the fact that 80%of the Cameroon population are unbanked and they have little or no knowledge of what it means to do money transactions online or purchasing products using their platforms etc.
People still prefer the long queue at the bank for their transactions, such as paying bills, because of the fear of being duped.
In conclusion, fintech is not a danger to finance, but rather an improvement, an evolution of the sector. Digital finance will improve financial services in terms of accessibility and cost. The World Bank has also identified it as a financial inclusion factor. Cameroon giving more rooms for young developers to come up with more advanced financial solutions will indeed contribute to financial inclusion and effectively contribute to the financial needs of the population.
Article by: Zixtech Corporation
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