This is a presentation by Richard Ketley, Director and Partner, Genesis-Analytics, South Africa, at the 3rd Annual East Africa FInance Summit

1. Financial Inclusion
New players and financing models

2. The Players
The Trends
The Funders
New directions

3. “In the period 2014 to 2017 the
share of adults with a financial
institution account remained flat,
the share with a mobile money
account almost doubled”..
World Bank Global Findex on Sub
Saharan Africa 2017

4. Progress in Financial Inclusion
90% Telco based
- Network
- Products
- Pricing

5. Progress in Financial Inclusion
90% Telco based
- Network
- Products
- Pricing
Except in
Real Time EFT
Card Payments

6. FINANCIAL INCLUSION DRIVEN BY INNOVATION IN FIVE KEY AREAS:
6Genesis Analytics team analysis, 2017; Finmark Trust; Cross-Border Remittances Study, 2016
1
2
3
4
5
Disruptive
ability
Micro credit:
• Micro credit has been a disruptor in Kenya (MShwari)
and Tanzania.
MPOS and Micro acquiring:
• Merchants are able to use their smart phones as a point of sale
Agency Banking:
• Using merchants as a way to reduce cost to serve
Mobile Money
• Led by mobile network operators
Remittance Payments:
• Mobile money reducing the cost of sending international
remittances

7. The Players
The Trends
The Funders
New directions

8. 8
MOBILE MONEY SERVICES ARE DIVERSIFYING
Bill Payments
Utility, health
bills etc.
Airtime
top-up
Paying
Merchants
International
remittances
Cash out
and
transfer
money
Savings
and credit
Government
payments
(taxes etc.)
Insurance
policies
Short term cash loan disbursed and
repaid with mobile money
Micro-credit and savings product
Jamii is a mobile management platform
for health insurance policies
To buy government bonds.
Municipalities to automate and
digitise the collection of local taxes
Airtel Money enables subscribers to
transfer money across East Africa
Vodafone M-Pesa enables Romanians to receive money
from other countries

9. 9
Voice
market
Mobile
money
market
Voice and mobile money market
share of top 5 MNOs in Africa
>25% 15-24% 10 - 14%
TELCO MARKET CONCENTRATED, SEVERAL PLAN TO BECOME BANKS

10. 0
20
40
60
80
100
120
2013/12/22
2014/01/22
2014/02/22
2014/03/22
2014/04/22
2014/05/22
2014/06/22
2014/07/22
2014/08/22
2014/09/22
2014/10/22
2014/11/22
2014/12/22
2015/01/22
2015/02/22
2015/03/22
2015/04/22
2015/05/22
2015/06/22
2015/07/22
2015/08/22
2015/09/22
2015/10/22
2015/11/22
2015/12/22
2016/01/22
2016/02/22
2016/03/22
2016/04/22
2016/05/22
2016/06/22
2016/07/22
2016/08/22
2016/09/22
2016/10/22
2016/11/22
2016/12/22
2017/01/22
2017/02/22
2017/03/22
2017/04/22
2017/05/22
2017/06/22
2017/07/22
2017/08/22
2017/09/22
2017/10/22
2017/11/22
2017/12/22
2018/01/22
2018/02/22
2018/03/22
2018/04/22
2018/05/22
2018/06/22
2018/07/22
2018/08/22
2018/09/22
2018/10/22
2018/11/22
Popularity of Search Terms
fintech: (Worldwide) blockchain: (Worldwide)

11. 11
DISRUPTION IS COMING MORE FROM BIG TECH THAN FINTECH
32%
68%
Fees collected by banks
Split of industry payment fees in China
(%, 2017)1
Invest.
Lending
Crypto
Payments
Fintech have invaded the global banking sector,
their focus being enhanced services delivery to the
customer.
Alipay is world’s largest
money market fund
valued at US$ 243 B.1
BigTech (Facebook, Google, Amazon, Tencent
(WeChat) and Alibaba are entering the market
with pre-existing scale and client reach.
Fees collected by TPPs

12. FINTECH MOVING TO A PARTNERSHIPS MODEL
• Brand recognition
• Large customer base
• Wide range of product
offerings
• Comprehensive
customer data
• Robust infrastructure
• Advance underwriting
capabilities
• Risk management
experience
• Access to capital
• Licensed to provide
regulated financial
services
• Culture of innovation
• Nimble
• Agility and speed to
market
• Disruptive mind-set
• Lean set-up and
absence of legacy
systems
• Technological expertise
• Customer data analytics
• Specialized solutions
• Scalable
• Innovative
solutions
• Deeper analytics
driven customer
engagement
• Enhanced risk
mitigation
• Improved
product
efficiency
offering
Bank strengths
FinTech strengths
Joint
strengths

13. Table of Contents
Financial inclusion trends in Africa
Funding of financial inclusion
MNO’s and financial inclusion
Private equity funding
The Players
The Trends
The Funders
New directions

14. FUNDING FOR FINANCIAL INCLUSION
14
Capacity building for financial
services providers
Financial literacy for individual
clients and households
Financial inclusion policy and
regulation
Development of digital financial
services.
Focus areas for
international
funders
Development of payments
infrastructure

15. SSA GETS THE LION’S SHARE OF FINANCIAL INCLUSION FUNDING
15Source: 1. www.cgap.org, January 2018 |
Regional share of world funding towards financial inclusion
20%
10%
9%
24%
30%
6%

16. INTERNATIONAL FUNDERS OF FINANCIAL INCLUSION
16Source: 1. www.cgap.org, March 2018 |
Funding towards financial inclusion in
SSA
(USD billion, 2016)
20162006
1.7
4.7
+11%
Top 5 countries attracting financial
inclusion funding
5. Nigeria
1. Ethiopia
2. Kenya
3. Tanzania
4. DRC

17. THE COMPOSITION OF FUNDING HAS CHANGED
17
Multilaterals Bilaterals For profitFoundations
Country platforms Private Equity Direct grants Direct investments
MNOs Banks Fintechs Insurance

18. The Players
The Trends
The Funders
New Directions

19. 19

20. 20

21. Smartphone
penetration
2025
80%