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Issue 144
Aug 15 - Aug 21, 2022

Hi there,

We just published our second long-form article for Decode Fintech! In the deep dive, we explore NIBSS Instant Payments (NIP), a critical piece of infrastructure that powers instant payments in Nigeria. You can read the article here, and share it with your network and communities.

On Wednesday, August 31, we’ll also be hosting a Decode Fintech Roundtable - an hour-long virtual chat where industry experts will further discuss the role of NIP in enabling Nigeria’s digital economy. Book your free seat here and invite your friends.

Finally, Glory Glory Man United.

Enjoy the rest of the week!

Tochukwu Ironsi
Market Intelligence Specialist, Paystack
Payments
South AfricaTelkom Business launches Telkom Lend for small businesses. Telkom Business, the business subsidiary of Telkom, has launched Telkom Lend, a micro-lending solution for small businesses. The business loans will start from $1,200 and will be payable over three to twelve months. Business Tech
EDITOR'S NOTE

This is not Telkom Business’ first attempt at SME lending. In Issue 69, almost exactly two years ago, we reported on Telkom Business’ Yellow Pages partnership with Fundrr to provide SME loans to South African businesses. Then we wrote:

”… unlike their counterparts (which are mostly subsidiaries) in other sub-Saharan markets, SA telcos seemed to have abandoned the bottom-up mobile money approach in favour of more provider-agnostic digital services that capture non-customers. This might be because SA already has one of the highest financial inclusion rates in SSA - about 4 out of 5 South Africans have a bank account. This limits the demand for basic cash-in/cash-out mobile money services as evidenced in the failed M-PESA launch months ago. Hence, the goal does not seem to be to entrench or expand existing mobile network distribution, but to diversify top-line revenue as income from voice and data continues to fall.”

These motivations and potential benefits still exist for Telkom Business. But with Telkom Lend, the fintech is looking to scale its lending operations beyond just Yellow Pages users, own the direct financial relationship with SMEs, and capture more of the interest margin on loans. 
Conversations
AfricaWhat’s the future of payments for SMEs in Africa? In this article, John Haulay makes interesting arguments for why SMEs prefer payments via mobile money over other payment methods. Medium
Regulation
South AfricaSouth African Reserve Bank provides guidance on crypto transactions. The South African Reserve Bank’s (SARB) Prudential Authority has published a guidance note to banks in South Africa on handling crypto transactions. The apex financial regulator has directed banks to build proper risk frameworks for working with crypto asset service providers (CASPs) rather than avoid dealings entirely. TechCabal
EDITOR'S NOTE

Here’s a link to the full guidance note. One way to manage perceived risk associated with a financial product is to totally prevent customers and financial institutions from interacting with the product. Another way to manage that risk is to allow the financial product carefully interact with existing risk frameworks and iterate those frameworks to minimize the risk over time.

With this guidance, the SARB has chosen the second approach. This allows banks to provide needed financial services to CASPs and maybe most importantly, enables the SARB to keep a keen eye on crypto, which has gained great organic adoption.
NigeriaFCCPC directs payment providers to suspend payments for lenders. The Federal Competition and Consumer Protection Commission (FCCPC) has directed Nigerian payment companies to stop providing financial services to reported lending companies. This follows previous complaints from consumers over predatory lending practices. Nairametrics
GhanaBank of Ghana (BOG) launches a regulatory sandbox. The Bank of Ghana has unveiled its sandbox program for financial services. The new sandbox allows startups and established financial institutions to test out new financial products before fully releasing them into the market. The BOG has partnered with EMTECH for the sandbox and has also updated the regulatory framework to clarify the previous guidelines. Benjamin Dada
Fundraising
AfricaPastel raises $5.5 million in seed funding. Nigerian-based payments and business operations startup, Pastel, has raised $5.5 million in seed funding. The new round was led by TLcom Capital with plans to raise debt funding in January next year. TechCrunch
South AfricaCape Town Stock Exchange raises $5 million. Cape Town Stock Exchange (CTSE), a stock exchange based in Cape Town, South Africa has raised $5 million in new funding. The new round was led by Imvelo Ventures and includes existing investors such as Lebashe Investment Group.  IT News Africa
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