Botswana Is Missing Out On The Africa FinTech Wave

On Tuesday, Flutterwave, the Nigerian payments startup company, announced that it had closed a Series C funding round of $170 million, putting the fintech company's value to over $1 billion and officially giving it unicorn status. Flutterwave joins Interswitch (fintech), Jumia (e-commerce), and Fawry (fintech) as the only unicorns — companies valued over $1 billion— in Africa.

With over half of Africa's population unbanked, the continent's fintech market remains huge and investors, especially venture capitalists, have identified and are capitalizing on the opportunity by funding the continent's innovators who are tackling the country's banking problems. Just a few months ago, PayStack, another Nigerian fintech startup, was acquired by Stripe for over $200 million.

The need for financial inclusion in the continent remains high and the COVID-19 pandemic has further exacerbated it and presented even more opportunities for growth for these startups. For example, while most non-tech companies were struggling during the course of the pandemic amidst lockdowns and travel restrictions, Flutterwave achieved an impressive 100% growth in revenue during that period. 

For Botswana, the banking trend is pretty much the same with most of the country's populace not having a formal bank account. The situation is even more prevalent in the informal sector where, for those operating their businesses in the sector, as a result of exorbitant bank charges and other bureaucratic red tapes, having a bank account is not even a consideration.

This is where the country's innovators in fintech should come in. As evidenced by the aforementioned startups which have managed to be successful and attain unicorn status, the best way to be successful in fintech is by creating unique solutions to solve unique and country-specific problems. Like how Flutterwave was able to solve the problem of payment processing for Nigerians and eventually scale to most of the continent, a Motswana innovator stands a better chance of being able to invent an effective solution to payment solutions faced by Batswana.

With investors lining up to put incredible amounts of money into Africa's fintech sector, creating an enabling environment for innovations will go a long in accelerating digital transformation in the continent and if Botswana plays her cards right, can get a piece of the pie and have a few fintech unicorns of her own. 

Fintech innovations can go a long way in making it easy for people to move money, have access to financial information, and make borrowing easy which would, in turn, make life easier for people who have no access to traditional banking institutions. This would boost economic activity in the country as those who have been previously left out from accessing banking services like informal traders can now have access to them.

To harness all these transformative advantages that can come with fintech innovation, there first has to be an enabling environment for these innovations to actually happen and investors to be nudged to put their money in. From the innovators' side, more effort has to be put into coming up with solutions that can not only change lives but also scale. From the government's side, more innovation-friendly regulatory frameworks have to be put in place to remove bureaucratic red-tape for innovators and investors. Last but not least, academic institutions should constantly update their curriculums to put them in line with current trends so they can produce skilled personnel who would play a big part in aiding fintech innovation in the country.

It is only through a combination and cooperation of all these players that a synergy point can be reached which will put Botswana on the fintech map and transform Batswana's lives in the process. Companies like Flutterwave are examples of what benefits can be reaped when innovation is given room and an opportunity to prosper in a country. Following their blueprint can do a whole of good for Botswana and help it catch up in the digital revolution.