Fintech is driving the growth of e-commerce in Africa
Fintech has filled the gap left open by organized financial institutions. Traditional financial institutions have refused to change with the changing times, and adapt According to statistics, there are about 350 million individuals in Africa, who do not have bank accounts, accounting for 17% of the total world population of unbanked individuals. Africa is gaining global attention as e-commerce in Africa surges with 65.4 million consumers and is expected to continue to rise. Many factors may contribute to this growth, and the possible role being played by fintech.
To understand fintech’s contribution to the growth of e-commerce, it makes sense to examine the history of e-commerce in Nigeria. After many attempts, e-commerce finally took hold in Nigeria with the emergence of Jumia and Konga. There were predictions that the country's middle class would expand as income increased. In the year 2012 and after, oil prices were experiencing a boom. In fact, a 2014 Mckinsey report suggested that Nigeria's economy was predicted to become a major economic force. However, everything took a wrong turn when oil prices crashed in 2015 and the economy slid into a recession. The middle class shrunk and many people found themselves below the poverty line. Jumia and Konga felt the impact of this and as a result, had to lay off most of their staff.
So what changed? Why are there so many more e-commerce businesses in Nigeria? You guessed right! The emergence of fintech. Before now an e-commerce store would need to integrate a payment option, but this wasn't cheap (it cost about 150,000 Naira, or about 300 Dollars) and not many small businesses could afford it.
Customers are now more confident in shopping online and with online payments. Klasha enables merchants worldwide to sell online to customers in Africa. Customers across the African continent are able to pay in local African currencies while enjoying super-fast last-mile delivery regardless of where the retailers are based.