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China’s Role in FinTech: The Steps to Africa

 5 min read / 

FinTech’s seemingly ever-expanding growth in recent years has given rise to a multiplicity of innovative developments within the financial and political sector, with more corporations willing to integrate this technology into their own systems. The Global FinTech Report 2017 estimates that 82% of incumbents will increase FinTech partnerships in the next three to five years, and with around 77% likely to adopt blockchain, the industry continues to attract ample attention from venture capitalists.

However, this dramatic acceleration of FinTech use is not limited to developed countries. Africa possesses its own rising FinTech stars.

Developing Africa

Africa, home to 1.22 billion people, is seizing the attention of many FinTech investors. One of Africa’s most prominent Bitcoin exchange firms, BitX, has led to the surging of Bitcoin prices within the continent in the last year. In 2015, ICE3x launched the first Bitcoin exchange in Nigeria, Africa’s most populous country. With an immense youth market of 33.6 million 18-35 year olds, the country soon became the largest recipient of remittances which, according to the World Bank, was $21mn. To further this success, the company has recently seized the opportunity to also launch cryptocurrencies Ethereum and Litecoin.

Alternate companies such as M-Kopa, which connects to over 500,000 homes through its pay-as-you-go solar power model, claims a rank of 34 on MIT’s top 50 smart firms list ahead of giants Adidas, Snap and HTC.

Most notably, there has been a considerable rise in mobile banking in Africa, with Safaricom’s notorious M-Pesa grappling with new financial technology to offer the 50% of Kenyan adults that currently own an account. M-Pesa, which formed in 2007 and now links with PayPal, is hailed as an example of the transformative impacts of FinTech on a country. With mobile payment commerce transactions valued at KES447.4 billion, it is estimated to have lifted 2% of Kenyan households out of extreme poverty whilst allowing over 185,000 women to enter the business world rather than having to remain in subsistence farming. In this sense, FinTech and mobile banking can be recognised as mechanisms for development in less wealthy countries.

Financial (Inclusion) Technology

Mobile payment platforms are considered to be a major force pushing for financial inclusion across Africa. Financial inclusion has already rocketed from 21% of people with a financial account in 2011 to 63% in 2014, displaying a growth of more than 200%. As the process continues to evolve with new developments in the FinTech industry, there is certainly space for high-profile firms to invest. There is an opportunity for Bitcoin to lever African banks through bulwarking disruptors and promoting financial transparency to provide convenient and secure banking services.

Nevertheless, the World Bank notes that sub-Saharan Africa remains an expensive region. With remittances being the biggest source of foreign investment in Africa at an average cost of 9.5%, this detrimental issue requires a solution. Bank penetration in the continent is a mere 35% and lack of adequate infrastructure, utility and intergovernmental data connectivity pose further problems, evidencing a clear gap in the continent’s market for FinTech and mobile banking companies.

China’s Role

There is an immense opportunity for reducing the cost of transferring money into and across Africa. Standard Bank, Africa’s largest asset lender, did exactly this in 2015 when it partnered with tech giant WeChat to fix a stake in Africa’s growing mobile payment market. The collaboration, initially launched in South Africa, offers users access to P2P monetary transfers and in-app payments, amongst other things. China is eager to take on this role, also investing in South African micro-jobbing service Money for Jam. China is at the forefront of financial innovation and considering the significant investment in countries such as Ethiopia, Zambia and Kenya, a focus on African FinTech could be seen as a feasible extension of this.

Chinese companies are driving huge change in East Asia through the innovativeness of their products and the ability to capture markets accounting for 3 or 4 billion users. This demonstrates their potential, which could, in turn, be applied to Africa.


Financial technology is proving to be revolutionary not only within technologically-developed areas, but amongst less wealthy nations, demonstrating its ability to act as a platform from which business and trade can grow. The benefits of FinTech are endless; mobile banking can advance financial inclusion, crowdfunding can raise money for developmental projects and citizens can gain access to an increasingly interconnected world which they themselves can contribute to. In this manner, it is vital that FinTech giants such as those in China lead the revolution in spurring technological growth within Africa.

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