by Michael Manirakiza
We are in an exciting moment of strong, rapidly growing African economies. To sustain and support this growth across the continent, we must address the challenges of strengthening our financial sectors and opening data ecosystems in keeping with the current era of open banking. Addressing these challenges requires prioritizing innovative solutions to support nascent industries, and to fund companies that are scaling up. In this vein, Africa is leading the transition towards mobile money and digital transactions, which will increase access to capital for companies and individuals without prior access.
Presently, however, we still have fragmented, high-cost financial payment systems that are exclusionary, and maintain a significant barrier to entry for entrepreneurs in many industries. Collaborative and innovative solutions to these challenges will promote business creation and facilitate opportunities for young people who are driving Africa’s growth.
An important solution that addresses these challenges is a well-integrated payment system that accelerates financial inclusion and empowers entrepreneurs. Solutions to tackle fragmented payment systems and closed data ecosystems are available but require implementation at scale. Private sector implementation can be strongly encouraged by government-led policies. For instance, governments can create a framework to reward early adopter companies that transition their practices to utilize new technologies that promote financial inclusion. One example of promising technology in the payment space is blockchain tokenization, which is potentially disruptive to the traditional financial sector and can contribute towards African economies leapfrogging into the future. Tokenization is the digitalization of an asset, where each token represents ownership of a part of the underlying infrastructure project. Blockchain enables the storage and transfer of these cryptographic tokens in a frictionless manner. The benefits could be numerous: faster and cheaper transactions, more transparency, more accessible and greater liquidity.
Our company, Plendify, is building a mobile-first technology platform that connects business suppliers with buyers seamlessly in an online marketplace and where their transactions can unlock access to working capital. We will enable businesses to come online, many of them for the first time, and provide them with a payment platform that can link to the orders business clients place with them. Today, most businesses still use cash transactions when purchasing supplies, making it difficult and time-consuming to track and record these payments. Plendify will address this issue of cash payments and bring various payment providers under one roof within the marketplace. By building a trusted platform between buyers and suppliers, we can promote faster commerce and solve a major bottleneck by integrating various payment gateways within a platform that identifies the business, business owner and the volume of sales/purchases they make daily. This data can then arm the business owner with documented proof of their business’ performance, and they can present it to a financial institution for additional support.
Plendify believes that the future is about integration with other platforms to promote interoperability across the supply chain of goods and services. Businesses should have a wide variety of payment options at affordable prices. We have an opportunity to unlock a new wave of innovation that will benefit companies with an ease of doing business, and efficiently paying for supplies. The future of African economies lies in more integration and more partnerships that move everyone forward and toward financial inclusion.