Savings, investments and loans, the next frontier for fintech SA

South Africa’s booming fintech sector is one of the country’s major success stories. Just three months into 2022, and there have been major funding announcements from Floatpays, Lipa, Tall Order and Stitch, among others, says Tony Mallam, UBU’s chief executive and team member involved in the development of upnup, a micro-savings platform. Mallam has also been an angel investor in various startups, including Clickatell, which just raised over $91 million in funding.

Google’s recently released Africa Developer Report reveals that South Africa has a strong developer landscape due to the continent’s largest developer population, investment in cutting-edge technologies, strong education and robust startup and tech ecosystems, all of which are the foundation of South Africa. performance, says Mallam. “Certainly money is the lifeblood of any successful industry and South Africa has a number of willing investors, both locally and internationally, in the form of major players such as Naspers Foundry , Knife Capital and an established network of angel investors.”

The South African financial sector has been recognized for many years as an established and innovative sector, adds Mallam. “In South Africa, we do our banking from our mobile phones while other countries continue to issue cheques. We have also seen the rise of established players in mobile payments, payment apps and in the cryptocurrency space.

Beyond this, it is also critical that the South African Reserve Bank (SARB) has recognized the potential of the industry, establishing the Intergovernmental Fintech Task Force in 2016 and a dedicated Fintech Unit in 2017. means that the SARB is not only working to understand the landscape and developing policies and regulations, but that it is also working to innovate in this space,” says Mallam.

“All of this is on top of the growing wave of disruption in South Africa’s traditional financial and banking sectors. We’ve already seen fintech players like Tyme Bank start to challenge the traditional ‘big four’ banks by making it easier and cheaper to open a bank or savings account, and the range of affordable card machines de Yoco enables small businesses to embrace digital and card payments where they previously could only accept cash.

Mallam predicts that as established fintech zones begin to saturate, there will be a shift towards savings, investments and loans. Floatpays, for example, which recently secured Naspers funding, allows employees to access a portion of their earned, but not yet paid, income at any time of the month to cover unforeseen expenses. According to Mallam: “Micro-savings and investment products, which allow consumers to save a small amount of money, are well suited to the South African context where savings rates are low and the cost of life means that not everyone can save amounts of money every month.

South Africa’s fintech sector has the potential to improve financial inclusion, which goes far beyond just having a bank account, says Mallam. “It’s about being able to save for your future, take out a loan to finance your child’s studies or start a business, or simply to insure your property.