Stellas Digital Bank, a Nigerian fintech player, is celebrating its first anniversary with a pledge to continue deploying technology to enhance the financial experience of its users. Since its launch in 2022, Stellas has become one of Nigeria’s top digital banks with over a million users across the country, with features such as “ghost mode” and “Stellas vault” catering to specific needs of its users. The bank’s success demonstrates the growing demand for innovative digital banking solutions in Nigeria.
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Ethiopia: Safaricom prepares launch of M-Pesa mobile money service
Safaricom, the Kenyan mobile network operator, is preparing to launch its M-PESA mobile money service in Ethiopia by April 2023, four months after receiving approval from the Ethiopian government. With a population of around 120 million people and a mobile penetration rate of 57%, Safaricom CEO Aanwar Soussa believes Ethiopia presents a great opportunity to grow the business to the level seen in Kenya in 10 years. M-PESA is already available in seven African countries and has more than 29.5 million active users.
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South Africa: Smile Identity raises $20m Series B
Smile Identity, an African KYC and identity verification platform, has raised $20m in a series B funding round to expand its product and engineering team and AI-powered biometrics. Led by Costanoa and Norrsken22, the round also included participation from Commerce Ventures and Two Culture Capital. Smile Identity intends to expand its presence across Africa and into Francophone and Arab-speaking markets. It also plans to work closely with regulators and ID authorities to build consumer consent standards and enforce African data protection laws.
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Uganda: SC Ventures and Yabx to start providing consumer finance
Standard Chartered’s innovation and fintech investment arm SC Ventures has partnered with fintech Yabx to offer consumer finance in Africa. The companies will offer “purpose-driven loans” in Uganda, focusing on education, skill development, and gender, before expanding to other African markets. The companies are leveraging the impact of the Covid-19 pandemic to digitize banking and access to credit for underbanked customers. The partnership aims to provide a seamless experience, using technology and data to serve the underserved in Africa.
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Kenya: Nigerian digital bank Umba launches services
Nigeria-based digital bank Umba has launched its services in Kenya, following its acquisition of a majority shareholding in Daraja Microfinance Bank. The bank offers a range of services including current accounts, savings accounts, fixed deposit accounts, lending, and payments, with a focus on serving Africa’s underserved market. Umba aims to offer a transparent, low-fee service, and has strong backing from leading fintech investors including Costanoa Ventures and Monzo founder Tom Blomfield.
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Ghana: Fortek partners with Codebase on digital financial service offering
Fortek, a Ghanaian financial platform services provider, has partnered with Codebase Technologies for its Digibanc platform. The partnership aims to provide affordable, accessible, and transparent digital financial services and support fintechs, banks, and startups with their digital services. The collaboration will help accelerate digitization, boost entrepreneurship, grow the economy, and broaden financial inclusion in Africa. The two companies plan to fill the gaps in traditional financial institutions and meet the needs of their customers.
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Nigeria: Mobile banking usage triples year-on-year
The Central Bank of Nigeria (CBN) policy mandating a cashless economy is driving the growth of mobile payment gateways. The recent surge in the use of mobile banking has resulted in failed banking apps and customers being stranded, as Nigeria’s infrastructure is not robust enough to handle the volume of transactions. The Chairman of Voriancorelli and Cofounder of Cellulant, Bolaji Akinboro, said the problem lies with the mobile network backbone, which is not being invested in properly by the state. The CBN intends for a cashless economy to be driven by a mobile-first generation by 2025, but Nigeria’s lack of smartphone access and underdeveloped infrastructure is an issue.Regenerate response
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South Africa: Zero Bank claims zero fraud on credit cards
South African digital bank Bank Zero has reported zero successful card fraud incidents since its launch in 2019, despite numerous attempted frauds. The bank attributes its success to its use of advanced technology such as biometric identification and behavioral analytics. Bank Zero’s security system always requires a customer’s authorisation for an online card transaction, whether the website is secure or not, and the bank has a registered patent on its card to prevent skimming. While its customer base is smaller, Bank Zero still claims it is statistically significant.
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Ghana: Access to financial services leapfrogs due to mobile money, fintech
Financial inclusion in Ghana has increased from 22% in 2011 to 68% in 2021, driven by mobile money, digital banking and fintech solutions, according to the governor of the Bank of Ghana, Dr. Ernest Addison. He stated that the bank’s proactive stance on digital finance and issuance of Branchless Banking Guidelines in 2008 paved the way for fintechs to reach the unbanked and underserved. Despite surpassing the average financial inclusion rate of 55% in sub-Saharan Africa, Dr. Addison stressed there is still much to be done to enhance financial inclusion, especially for women, the unbanked, and underrepresented groups in the population.
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Kenya: Safaricom appoints seasoned banker Esther Waititu as fintech chief
Esther Masese Waititu has been appointed as the new Chief Financial Services Officer at Safaricom, a leading telecommunications company in Africa, effective February 21st, 2023, pending regulatory approval. She brings over 15 years of financial services experience to the role, previously serving as Director of Corporate Banking at KCB Bank Group and has held various leadership positions at Standard Chartered Bank, Stanbic Bank, and Commercial Bank of Africa.
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South Africa: Lulalend to scale up SME lending
Lulalend will use its recent Series B investment to scale the firm’s business to tackle the estimated $20bn SME credit gap in South Africa. Lulalend offers a digital-first approach and a proprietary credit scoring algorithm for faster, simpler, and more transparent access to business funding. To date, it has disbursed billions of rand to SMEs across the country and has a waiting list of 20,000 businesses. The funds raised will be used to increase the size of its loan book, bring new solutions to market, and invest in technology and talent.
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Ethiopia: Bank of Abyssinia modernizes its software platform
Newgen Software has partnered with Bank of Abyssinia to automate the loan origination process for its retail and small to medium enterprise loans. The platform, NewgenONE, will streamline loan processing, disbursement, and tracking with business rule engine, document management, and workflow management capabilities. The solution will be used in more than 750 branches in Ethiopia and will allow the bank to respond faster to customer requests and digitize its loan process, enhancing the overall customer experience.
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South Africa: Lulalend raises $35m Series B
South African fintech Lulalend has raised $35m in a Series B funding round, led by Lightrock and featuring participation from DEG, Triodos Investment Management, Women’s World Banking Asset Management, IFC, and Quona Capital. The company provides loans and AI-driven cash flow management for small and medium-sized enterprises and is working with Women’s World Banking Asset Management to expand its product to women-owned SMEs. The funding will be used to invest in technology and talent to launch its new digital business banking proposition.
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South Africa: BCG report says traditional banks need to grow digital offering
Retail banking in South Africa is evolving rapidly due to the COVID-19 pandemic, with about 80% of consumers preferring to do their day-to-day banking digitally, according to a report by Boston Consulting Group (BCG) in partnership with Discovery Bank. BCG suggests that traditional banks may struggle to meet new digital expectations and compete with new, more agile challenger banks like Tyme Bank and Bank Zero. However, the report also suggests that traditional banks could leverage their data to understand customer needs and use AI models to predict their needs before they arise.
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Kenya: Central bank approves new digital lenders
The Central Bank of Kenya has approved 12 more digital credit providers, bringing the total number to 22. Some of the approved companies include Getcash Capital, Jumo Kenya, and M-Kopa Loan Kenya. The bank has received 381 applications and says more approvals will be granted once the remaining applicants submit the necessary documentation.
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Ethiopia: CBE launches remittance app
Commercial Bank of Ethiopia has launched Ethio Direct, a digital remittance app for the Ethiopian diaspora in Canada, Israel, USA, Italy, South Africa, Sweden, UAE, UK, and Saudi Arabia. The service allows users to send dollars to Ethiopia with international payment cards, from $5 to $1,000, and is available for download from the App Store and Play Store.
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Ghana: BoG regulatory sandbox invites applications
The Bank of Ghana (BOG) has opened its regulatory sandbox for financial institutions and fintech startups to test new digital business models and technology. The BOG will accept applications for the first cohort from February 13th to March 14th, with a focus on payments, remittances, crowdfunding, and micro-lending. Successful applicants will be informed within 21 working days after the application window closes.
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Nigeria: CBN’s regulatory sandbox now live
The Central Bank of Nigeria (CBN) has announced that its regulatory sandbox is live, in a tweet from the bank’s official Twitter page. The sandbox is designed to provide fintech start-ups with a way to test innovative ideas in a secure environment with guidance from the CBN, and is open to companies with an existing CBN license and other technology companies with innovative financial solutions. The aim of the sandbox is to reduce the time-to-market for products, increase competition, and foster engagement between the CBN and fintech startups, but it will not be providing funding for any of the participating companies.
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Zimbabwe: AFC Commercial Bank facilitates remittance transfers
Mama Money, a South African fintech that facilitates cross-border money transfer, has partnered with AFC Commercial Bank to allow customers to send money to any AFC Commercial Bank branch for cash collection at 45 locations across Zimbabwe. The monthly remittance flows from South Africa to Zimbabwe range between $30 to $60 million US dollars, but the cost of sending money can significantly reduce the impact that remittances have. Mama Money facilitates money transfers to over 50 countries across Africa, Asia, and Europe.
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Africa: Fintech drives continued growth in venture capital
While global venture capital funding was down 35% last year, financing for startups in Africa rose 8% to $6.5 billion, according to a report by venture capital firm Partech Partners. The 8% increase came through 764 rounds, with debt funding doubling during 2022, up 102% to $1.5 billion, offsetting a small drop in equity rounds, down 6% to $4.9 billion. However, the report noted that the African market began to slow down in Q1 2022, with a 14% drop in activity compared to the last three months of 2021.
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Nigeria: financial infrastructure firm TeamApt rebrands as Moniepoint
TeamApt, a fintech company offering one of the largest commercial banking systems in Africa, has relaunched as Moniepoint. The platform focuses on making banking services accessible to all, including low-income households and small businesses. The platform offers a wide range of services including online account opening, fund transfers, bill payments, and airtime top-up. Moniepoint aims to enhance financial inclusion in Africa and bridge the gap between the banked and unbanked population in the continent.
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South Africa investigating introduction of ‘digital rand’
The South African Reserve Bank (SARB) is investigating the use of Central Bank Digital Currency (CBDC) and testing a “digital rand” but is trying to narrow down on a specific use case and not in a rush to be a global leader for the format. SARB Governor Lesetja Kganyago said that South Africa would be “very fast followers” regarding the development and implementation of central bank currencies, learning from other countries that are ahead in development.
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Mambu enables South African TymeBank to launch in the Philippines
GoTyme Bank, a newly launched Filipino digital bank, has partnered with global cloud banking platform Mambu to deliver an innovative digital banking solution that aims to improve access to high-quality financial services for Filipinos. Singapore-based Tyme Group, which has partnered with Gokongwei Group to launch GoTyme Bank in the Philippines, has had a long-standing relationship with Mambu. They worked together for many years in South Africa, where Mambu powered South Africa’s TymeBank to transition into a fully-fledged digital bank.
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CBE expands digital offering
The Commercial Bank of Ethiopia (CBE) has signed an agreement with Seregela to collaborate on payment systems, enabling customers to make payments using CBE card, mobile banking, or CBE Birr. They also launched an application that allows users to pay for purchases within a month of the date of purchase. CBE facilitated Birr 2 trillion using its digital channels in the past year and has 1838 branches and 35 million customers, facilitating 20 million transactions per month.
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Ghana CSA cautions on digital lending apps
The Cyber Security Authority (CSA) in Ghana has warned the public against using mobile apps for digital lending that are not sanctioned by the Bank of Ghana (BoG) and the Data Protection Agency (DPA). It says that it has received reports of cyberbullying experienced by users of digital lending mobile apps, which threaten users with their identities being published as wanted persons or fraudsters on various social media platforms. It advises individuals to review access permissions for mobile applications carefully before installing them.