Financial services for inclusive platform economies in Africa - - PowerPoint PPT Presentation

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Financial services for inclusive platform economies in Africa - - PowerPoint PPT Presentation

Jul 21, 2023 396 likes •558 views

Financial services for inclusive platform economies in Africa March 2019 About insight2impact Launched in 2015, insight2impact is a global resource centre jointly hosted by Cenfri and FinMark Trust that harnesses the power of data to advance

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Financial services for inclusive platform economies in Africa

March 2019

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About insight2impact

insight2impact initiatives to achieve impact:

  • Researching how data can drive both client and firm value in the financial sector
  • Offering technical assistance to financial service providers who wish to translate data into

insights

  • Improving data quality by sharing practical information and best practices on data collection

and analysis

  • Making relevant datasets and tools publicly available through our data portal
  • Changing the way that financial inclusion is traditionally measured by developing and piloting

new measurement frameworks

  • Inspiring young entrepreneurs and developers to harness the power of data

Measurement Data quality Open data portal Client research Application Lab

Launched in 2015, insight2impact is a global resource centre jointly hosted by Cenfri and FinMark Trust that harnesses the power of data to advance financial-sector development and generate better financial inclusion and welfare outcomes.

Deepening measurement in financial inclusion Advancing survey and geospatial data for financial inclusion Enabling access to pioneering client data and research Partnering to advance the use of client data and bring innovations to market Improving relevance and quality of client data and research for financial service providers

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As platform ecosystems evolve, so should the financial services that serve them

JP Morgan Chase: 1.6% of accounts in the US Research ICT Africa: 1% of adult population in Africa*

JP Morgan Chase Institute (2018) “The Online Platform Economy in 2018”. Research ICT Africa (2017), “What is the state of microwork in Africa? A view from seven countries.” * Aggregated across Ghana, Kenya, Nigeria, Rwanda, South Africa, Tanzania and Uganda

A multi-sided digital platform (MSP) is a company or organisation that derives value primarily from enabling and facilitating observable, direct interactions between two or more distinct groups of users affiliated with the platform.

“ ”

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9 12 14 19 29 35 49 64 81 101 132 195 249 268 50 100 150 200 250 300 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 55% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Internet usage (% of population) in our focus countries Platforms active in 2018, cumulatively displayed by year of launch Insurtechs active in 2018 in Africa, Asia and Latin America Financial inclusion (% of adult population) in our focus countries

The rise of Africa’s digital platforms and growth in financial technology

Fintech industry to contribute $150 billion to SSA economy by 2022, according to FSDA

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What makes Africa’s digital platforms different?

Informal sector dominant

  • Low levels of formal employment
  • Large number of micro-enterprises with low production capacity
  • Production standards for goods and services not enforceable
  • Underdeveloped supply-chains
  • Low tax base
Sources: BFA, ILO (2018)
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The landscape of Africa’s digital platforms

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Online shopping and freelancing platforms most prevalent 91 75 53 37 27 26

Online shopping the most prevalent type of digital platform in Africa, followed closely by freelancing

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Africa USA Europe Other

Large proportion of Africa's digital platforms are homegrown

222 22

97% of online shopping

platforms in focus countries

  • riginate in Africa

16% of freelance platforms

  • riginate outside of either

Africa, Europe or the USA

19

14

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South Africa Nigeria Ghana Kenya China Uganda Botswana Zimbabwe Tanzania Rwanda Zambia Mozambique 5 10 15 20 25 30 35 40 45 50 25 35 45 55 65 75 85

Used internet for online shopping or to pay bills (% of population) Made or received digital payments in the past year (% of population)

Digital payments in the e-commerce market

Africa’s B2C e-commerce market valued at US$ 5.7 billion (0.5% of GDP in 2017)

Sources: UNCTAD (2018), World Bank Global Findex (2017)
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41% 30% 40% 80% 21% 7% 38% 75% 29% 18% 18% 9% 100% 41% 36% 22%

Cash Bank transfer Mobile payments Card PayPal Digital wallet

Consumer payment methods utilised by % of platforms Provider payment methods utilised by % of platforms Accessed by % of adult population in focus countries

Africa’s digital platforms accept a variety of payment methods

Opportunities to close financial barriers to platform usage

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Financial services distributed by Africa’s digital platforms

10 20 30 40 50 60 All Online shopping (only goods) e-hailing Logistics/courier Freelance Rental Other Online Shopping (only restaurants)

Digital wallet Insurance Credit Savings

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Partnerships between digital platforms and financial service providers enable distribution

Sub-Saharan Africa (SSA) Asia

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Incentives for digital platforms and financial service providers to partner

Leverage platforms’ scale Cost effective distribution Lean on network data Build trust through brand association

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SLIDE 14 Established by Sponsored by

How to find us

Get involved. Contact us. i2ifacility.org

@i2ifacility /insight2impact /insight2impact /i2ifacility

Chernay Johnson (Engagement Manager) chernay@i2ifacility.org Matthew Dunn (Senior Researcher) matthewd@i2ifacility.org