Over the last few years, West Africa has seen a significant increase in the number of fintech startups that are building unique ways of enhancing access to finance for unbanked people.
From credit reporting for people at the bottom of the pyramid to agri-tech products that encourage farmers to use financial services to increase their crop yield, the players in this space are expanding the financial safety net amongst the most vulnerable in society.
In Sierra Leone, almost 87% of the adult population does not have access to financial services, which limits upward mobility amongst the lower strata in society.
However, there has been an increase in the number of local fintech organizations that are building mobile-based products that aim to bridge the digital divide and provide essential financial services to the unbanked.
The Sierra Leone Fintech Association (SLFintech) was formed last year with the intent of advocating on behalf of the country’s budding fintech industry. Apart from championing the industry’s requirements to the regulatory authorities, it also aims to attract foreign investors and connect them directly to the fintech players in the country.
On February 22nd, 2018, the Association organized a Strategic Coffee Morning meeting on the topic of “Fostering and increasing investment in fintech in Sierra Leone” in collaboration with Comic Relief and the United Nations Capital Development Fund’s Mobile Money for the Poor.
With representatives from the leading fintech startups, mobile network operators and regulatory authorities, the discussions centered on the following key questions:
- What are the most pertinent regulatory obstacles that need to be resolved to open the space for fintechs to flourish in Sierra Leone?
- What key funding sources can Sierra Leonean startups tap into?
- How can we increase the attractiveness of Sierra Leone as a Fintech investment destination?
- What kind of assistance can Comic Relief and its partners provide to the fintech sector in Sierra Leone?
Richard Loat, the representative from Comic Relief, briefed the participants on the expanded role that Comic Relief is looking into for Sierra Leone, Zambia and Rwanda under the Jersey Overseas Aid Fund.
Sponsored by the state of Jersey, the fund aims to address long term funding gaps that exist in scaling financial inclusion across the 3 countries. In particular, the fund wants to establish a sustainable pipeline of funds and revenue generation for local fintechs instead of sponsoring different interventions in silos which becomes difficult to scale in the long run.
The discussions in the meeting were geared towards the common pain points that the fintech industry is facing in Sierra Leone, both from a regulatory and implementation point of view.
Participants discussed the most pressing issues that are stopping innovation in the sector and identified ways in which they can bring together more stakeholders on a regular basis.
The members of the Association also identified a number of upcoming regional conferences and events where they could showcase the work being done in Sierra Leone. They also collectively agreed to start playing a more engaging role in showcasing the local fintech products and services regionally.
It was also decided that the Association chalk out a roadmap for reaching out to investors and projecting Sierra Leone as the implementation ground for new fintech products and services.
Setting up the structures for any new industry is always a long and difficult task, especially when it involves regulatory oversight in an environment of poor connectivity.
The fintech industry in Sierra Leone still has a long way to go in achieving financial inclusion in the country. However, the Association has made substantial headway over the past year in starting the conversation with the different players on the changes that need to be introduced to catalyze the growth of fintech services.
By continuing to engage with partners such as Comic Relief, we are confident of remaking Sierra Leone as one of the key markets for fintech services in the region.