African fintechs stuck on lending, payments, says M-PESA boss

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M-PESA Africa CEO Sitoyo Lokokpiyit has urged African fintech companies to stop focusing narrowly on lending and payments solutions, saying the industry’s obsession with short-term gains is holding back real progress.

While giving a keynote speech at the Seventh Annual Financial Technology Service Providers Association of Uganda (FISTPA) Conference in Kampala, Lokokpiyit said the sector has made huge strides in financial inclusion but is now stuck in a comfort zone.

“It’s great that payments are big, but I think there's still a lot more that we can do around other areas from a fintech perspective, not just from payments and lending. It’s not just about financial inclusion anymore; we need to drive financial health,” Lokokpiyit told a room of regulators, innovators, and investors at the Sheraton Hotel.

He said that to encourage new ideas, M-PESA is opening its platform and APIs to developers. He said the company wants to create space for others to build services on top of its network while it focuses on managing compliance, cybersecurity, and customer verification.

“We’re opening up so that people in this room and across Africa can build for our customers,” he said. M-PESA, which operates across several African markets, serves 65 million customers and 5 million businesses, handling about 22 million transactions a day.

Richard Yego, CEO MTN MoMo (2nd left), Sylvia Mulinge, CEO MTN Uganda and Sitoyo during a panel discussion moderated by Peter Kawumi, regional MD at Interswitch Group. (Courtesy)

Vincent Tumwijukye, board chairman FISTPA. (Courtesy)

Vincent Tumwijukye, board chairman of FISTPA, said that higher institutions of learning ought to revise their curricula to ensure a continuous supply of market-ready talent. He said that with more talent in the market, capital will find its way to the Ugandan market.

“Last year, $2.2b came to Africa, but about 84% of it went to just four markets: Nigeria, South Africa, Kenya and Egypt. These four markets have only 30.2% of Africa’s population, yet receive 84% of Africa’s funding. This is both a challenge and an opportunity. It is an opportunity because Uganda seems to be a model for the remaining 70% of Africa’s markets. If you succeed in Uganda, you are more likely to succeed in the markets,” he said.

In a statement, the secretary to the treasury, Ramathan Ggoobi, said the government recognises Fintech as a critical catalyst of sustainable economic inclusion, an efficient mode of service delivery and building competitiveness across sectors.

“Financial technology has the power to break barriers, extend services to the underserved and unlock opportunities for small and medium-sized enterprises (SMEs), farmers, youths and women to participate in the economic activities,” he said.

Joseph Lutwama, director of research and insights at Financial Sector Deepening Uganda, urged fintech players to leverage technology to build collaborative digital marketplaces that are capable of moving the entire ecosystems forward.