The Next Wave: What can embedded finance do for African businesses?

April 4, 2022

In Africa, a lot of small, medium, and micro-business owners do not have a bank account and do not keep their money in the bank. These business owners resort to cash handling and physical bookkeeping, but these methods have a costly ripple effect.

This makes these businesses—which make up 90% of the businesses on the continent—underserved by traditional financial institutions. Because these business owners are locked out of the financial system, they can’t get insurance. For example, in Nigeria, businesses lose millions from frequent market fires, and it is harder for them to get back on their feet because they don’t have insurance. Ninety-seven percent of Nigeria’s population do not have health insurance, and the 3% who do get it through formal employment.

Next up is access to credit. Businesses can’t get loans from banks because their bank statement, account or details are not enough or available for the bank to lend them money. But you know who has this important financial journey data? Online marketplaces, offline wholesalers, logistics companies, and even social media companies. And what do these non-financial providers all have in common? They are familiar with the everyday purchases of consumers and have access to consumers’ financial journey data.

Read the complete article on Tech Cabal >

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