By Tom Jackson
The potential for good around the development of fintech in Africa is undeniable, but it also comes with risks.
A recent report by the Intergovernmental FinTech Working Group (IFWG) highlighted the many potential benefits of fintech, such as improving financial inclusion, but also noted dangers.
“Improving overall social welfare may be one of fintech’s greatest promises; however, it can also pose risks to consumer protection and overall stability,” the report said.
This poses a dilemma for financial sector regulators in Africa: regulate to reduce risks, or stand back and allow innovation to run its course? In South Africa, the Financial Intelligence Centre, Financial Sector Conduct Authority, Reserve Bank and National Treasury are collaborating on regulation, and there are noises from other countries too.
But is regulating Africa’s burgeoning fintech space a good idea? Aarti Shah, director of Kenyan growth advisory firm Cobalt Partners, thinks not.
“Generally, traditional, prescriptive regulation works well in stable industries such as food processing. Where there is rapid change, coupled with the opportunity for huge financial gains, such Click here to read entire article