Decode Fintech

Issue 99

Jul 19 - Jul 25, 2021

Hi there,

If you follow the NBA like me, you've probably been looking forward to the NBA 2021 draft for some time now. I can't wait to see what Golden State does with their pick by tomorrow. And yes, I'm a fan of the Golden State Warriors.

Enjoy the rest of your week!

Bolaji Akande

CSM - Key Accounts, Paystack

Regulation

Tanzania

Tanzania to review recently introduced mobile money tax due to public outcry. The new tax which is also called a 'patriotic levy' came into effect on July 15. The levy imposes a charge of between Sh10 and Sh10,000 (~$4) on mobile money transactions, depending on the transaction amount. Following the public criticism since its introduction, the Tanzanian government has formed a team to review the levy and come up with recommendations by July 29. The Citizen

EDITOR'S NOTE

The patriotic levy was a part of the government's plan to raise revenue for the 2021/2022 financial year budget by Sh1.254 trillion (~$540M). As part of the same budget, there's also a new SIM card levy that goes into effect in August. This new tax will impose charges ranging between Sh10 to Sh200(~$0.08) when Tanzanians buy airtime credit on their SIM cards. The government is hoping to collect an additional Sh396.3B (~$171M) through this levy. While it's obvious the government is trying to use these levies to fund their budget, the bigger concern of experts is that it could negatively impact mobile money adoption and financial inclusion in the country.

Nigeria

Nigerian telcos believe CBN's new framework will slow down mobile money penetration. The recently published framework for mobile money services allows only two models of implementing mobile money services in the country. One is bank-led: a bank and/or its consortium will serve as the lead initiator for mobile money transactions. The second model is non-bank-led: a CBN licensed corporate organisation, other than a telco, will serve as the lead initiator for mobile money transactions. Nairametrics

EDITOR'S NOTE

The notable exception from the models proposed by the new framework is the telco-led model, used by MPesa and other telcos in Kenya, where a Mobile Network Operator is the lead initiator. This exclusion, according to the CBN, is to allow for full control over monetary policy operations, minimise risks, and ensure that the offerings of financial services are driven only by organizations within the CBN’s regulatory purview.

Fundraising

Nigeria

Nigerian investment platform, Chaka, raises $1.5M in pre-seed funding. Chaka provides their users with access to the local and foreign capital markets. The capital from the pre-seed round led by Breyer Capital is to be applied towards their expansion efforts into other West African countries and securing partnerships with major financial institutions. TechCrunch

EDITOR'S NOTE

As reported in issue 95 of the newsletter, Chaka recently obtained SEC's first digital broker license. Things are beginning to look up for the investment startup, after just earlier in the year when the SEC declared their activities illegal and warned capital market operators to stop working with them.

Did You Know?

Remittances globally this year have been higher than expected due to a number of factors including less physical travel due to COVID-19 and innovation from fintechs. The decline in Nigeria is most likely a result of the increased preference to move foreign exchange through unofficial channels due to the disparity between official and parallel market exchange rates

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Do you have an announcement, event, or job posting you'd like to share, or have you come across an interesting bit of African fintech news recently? Hit reply and let me know! I might be able to include it in next week's newsletter.