Kampala. A total of $200m (Shs734b) was raised for the Financial Technologies (FinTechs) transactions in East African with Uganda contributing just 1.9 per cent.
Kenyan companies took the lions’ share of this leveraging on the country’s deep penetration of financial technologies.
This was revealed in a study on the performance of FinTechs titled: Fintrek: Exploring New Frontiers in Fintech Investments in East Africa, which was released in Kampala last Wednesday.
The report explored funding options currently available including debt offering, grants and equity provision.
The increase in the success of FinTechs in East Africa, continues to engage investors into desiring to understand available opportunities.
Mr Himanshu Bansal, the lead financial service consultant from Intellecap, said Kenya has leverage on the wide spread of payment platforms such as MPesa and MKopa to scale growth in its financial technologies sector.
Uganda is still challenged in this area due to low penetration of the internet as some of the payment platforms use internet.
Additionally, Uganda’s tax system, especially in regard to mobile money, experts say is a threat to growth of FinTech.
Mr Gerald Otim, the proprietor of Ensibuuko, financial technology platform, said: “FinTechs are not a threat but a linkage that banks can work with to boost financial inclusion,” instead of fearing that they would disrupt the traditional brick and mortar banking system.
“To achieve this goal [financial inclusion], there needs to be collaboration and commitment by all relevant players ranging from government to the private sector,” she said.
“We will continue to support FinTechs to tap into the potential of the productive poor and excluded groups such as women, youth and refugees,” she said.
Frustrated: According to Ms Jacqueline Musiitwa, the FSD Uganda executive director, Uganda must have a better business environment, tailor research to support market needs and ensure that relevant banking and telecommunications infrastructure is in place to assist furtherance of FinTechs.