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Issue 87
Apr 26 - May 02, 2021

Hi there,

Before getting to the news, here's one of my favourite pictures from the previous weekend. Simi, a colleague (Tomilola), and I doing our best impression of Formula 1 drivers in the Netflix show, Drive to Survive :)

Bolaji Akande
CSM - Key Accounts, Paystack
EthiopiaMTN and Safaricom-led consortium formally submit bids for Ethiopian telecom license. Following an initial application which involved ten other competing telecom operators, MTN and a Safaricom-led consortium have both submitted a formal bid for a telecom license in Ethiopia. The consortium includes Vodafone and the U.K. carrier’s South African unit, Vodacom Group Ltd. Upon review of the submitted bids, the Ethiopian government is looking to award two full-service telecoms licenses for successful bids as part of its plan to attract more foreign investment into its economy. Tech Central

The Ethiopian mobile money payments space promises to be interesting with these new developments. As the second-most populous country in Africa (estimated population of N110m) and with relatively low financial inclusion compared to its neighbour Kenya, things could move quickly over the next couple of years. While mobile money has been available in the country since 2015 with the launch of M-BIRR, the market is still very much in its early stages. This is mostly because up until April 2020, non-financial institutions were not allowed to offer mobile money services. Consequently, the market has mostly been led by M-BIRR, a mobile money service provided by 6 micro-finance institutions in the country and has a current total market share of about 1.9m customers.

It is also worth noting that government-owned Ethio Telecom, the current lone telecom operator in the country, recently got the green light to commence it's own mobile banking service, as reported in this issue of the newsletter.
AfricaSingaporean fintech, KiwiPay, launches expansion into Central Africa. KiwiPay, a digital payments company has entered into a strategic partnership with the Interbank Electronic Banking Group of Central Africa. The partnership will enable it to enter the CEMAC market made up of Cameroon, Central African Republic, Congo, Gabon, Equatorial Guinea, and Chad. As part of the access to the KiwiPay super app, KiwiGO, customers of the platform will be able to use other payment gateways such as WeChat Pay, Google Pay, AliPay, Apple Pay, and other local mobile operators. African Heroes
AfricaBusiness model innovation coming to mobile money in Africa. Toffene Kama highlights new business models that mobile money operators like WAVE Money are adopting to disrupt legacy players in Francophone Africa. Linkedin

The writer argues that zero fees on cash out transactions will encourage users to keep more money in their wallets citing WAVE Money as an example. We have observed that removing on and off ramp fees in a system can significantly drive adoption but also expose loopholes for users and agents to route money at some cost to wallet operators. A cost that can become unsustainable over time.
That said, transaction fees typically trend to zero and money follows the path of least resistance. This business model could change operating dynamics in the market and it will be interesting to see how this plays out.
KenyaCentral Bank of Kenya (CBK) finally introduces bill to regulate digital lenders, and jail time for unlicensed operators. The bill seeks to amend the Central Bank of Kenya Act, by providing licensing for digital credit service providers. The bill has been a while in the making, as there is currently no legal framework governing digital borrowing platforms in the country. However, before the proposed law takes effect, digital lenders will be required to register with the CBK within six months of the Act coming into force. Kenyan Wall Street

You can read full details of the bill here
EgyptCentral Bank of Egypt (CBE) now allows banks to offer more payment services with mobile wallets. The newest edition of regulations will essentially allow banks to provide lending and digital savings services to their customers via a mobile wallet. In addition, it will allow full interoperability for the transfer of money between mobile phone wallets. One of the impacts of this new regulation is that it allows banks to use customer mobile data, like electricity and water bill payments as an alternative to traditional methods of assessing their creditworthiness. The hope is that this increases loan accessibility for customers who otherwise do not have any credit history. Mobile Money Africa
NigeriaCentral Bank of Nigeria (CBN) licenses ten more International Money Transfer Operators (IMTO), target $10b in yearly remittance. Following recent policies to encourage more inflow of foreign currencies, the CBN has now issued ten more IMTO licenses, bringing the total IMTO operators in the country to 57. With all diaspora remittances through IMTOs now mandated to go through the deposit money banks rather than mortgage or fintech institutions, the central bank is looking to hit at least $10b in yearly remittances. Nigerian Investment Promotion Commission

For context on the CBN's target, following some aggressive policies (like this) designed to increase inflows of foreign currency like this, the CBN Governor, Godwin Emefiele, recently reported that weekly diaspora remittances rose from $5m to $30m.

Data from the World Bank shows that the CBN's target of inflows between $10B to $15B is below the inflows into the country in 2018 ($24B) and 2019 ($23B) before the global pandemic.
KenyaDigital Savings and Credit Co-operative Societies (SACCOS) in Kenya must register for new license by June 30. The Sacco Societies Regulatory Authority, in charge of regulating the operations of SACCOS in Kenya, has ruled out the possibility of an extension for compliance to the Sacco Societies Regulations, 2020, stating the societies had over a year to prepare for the new rules. The regulator has also warned the public in advance to desist from doing business with any SACCO that is not compliant by the deadline. With multiple cases of SACCOS going bankrupt with millions of shillings in assets, the main goal of the regulation is to secure members’ savings from pyramid scheme-like organizations. African Heroes
TunisiaTunisian fintech startup Expensya raises $20m funding for international expansion. After previously raising funding in 2016, 2017, and 2018, the B2B expenses management solution founded in 2014, saw a 100% growth during the height of the pandemic. The company wants to use this round of financing to accelerate its R&D and international growth. Expensya’s goal is to accelerate its international expansion and its deployment across mainland Europe. Disrupt Africa
KenyaKenya’s Ajua acquires WayaWaya to consolidate consumer experience play in African SMEs. Kenyan consumer experience platform for African businesses, Ajua has acquired WayaWaya, a Kenya-based AI and ML messaging and payments company. According to Ajua, the acquisition is primarily focused on WayaWaya’s payments bots system known as Janja. The platform, which has customers like Airtel, Ezee Money, Housing Finance Company of Kenya (HF Group), enables borderless banking and payments across apps and social media platforms. WayaWaya which raised $75,000 from Mest Africa in 2019, did not disclose the financial details of the acquisition. TechCrunch
AfricaBitPesa's parent firm, AZA Finance, raises $50m and acquires South Africa's Exchange4Free. Elizabeth Rossiello, CEO and founder of AZA Finance, says the acquisition of Exchange4Free moves AZA Finance, a provider of corporate treasury and FX products, towards its goal of opening up intra-African and frontier market foreign exchange flows. Exchange4Free, a cross-border payments firm, currently serves over 50,000 private and corporate clients globally. Tech Moran
GlobalBinance might soon be a competitor for fintech stock trading platforms. Following the launch of stock tokens, Binance, the world’s biggest crypto exchange recently disclosed it will list three new stock tokens over the coming weeks. The stock tokens will permit Binance users to trade fractionalized units of the share tokens, at cheaper transactional fees when compared to traditional trading apps. Yahoo Finance

According to Binance, the stock tokens are pegged to the performance of the respective underlying stock. If the price of the underlying stock rises, the price of the stock token is expected to rise accordingly. If the price of the underlying stock falls, the price of the stock token is expected to fall accordingly.
The process works like this: Once a Binance user opens a trade in stock tokens, a Swiss company called Digital Assets AG (DAAG), on behalf of a German firm called CM-Equity AG, purchases the corresponding amount of the company’s shares. A token is then minted on a private blockchain by Digital Assets. The underlying shares are put into a security account associated with CM-Equity AG, and Digital Assets AG sends the token through CM-Equity to Binance.
Finally, for all the excitement around this development by the crypto community, a number of regulators are all now investigating whether the stock tokens comply with the rules governing transparency and corporate disclosures in their respective jurisdictions, so watch this space and trade cautiously.
GlobalMastercard is looking to help governments evaluate the utility of central bank digital currencies (CBDC). CEO of Mastercard, Michael Miebach, says the card network will explore applications that can exist on top of CBDCs in the future. Mastercard has already been engaging with governments on central bank digital currencies. In February, the Bahamas launched an option for citizens to load the country’s CBDC onto a prepaid Mastercard. Financial Technology Africa
GlobalPayPal users can now link wallets to Coinbase in order to buy crypto. This integration with the newly-publicly traded exchange, Coinbase, gives Paypal users easy entry into the crypto world. Early last month, Paypal also announced that users of its peer-to-peer (P2P) payment app, Venmo, can buy, hold, or sell cryptocurrency from the app. All of this is in line with Paypal's plans to play more in the crypto space as announced towards the end of last year. PYMNTS
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