COVID-19 accelerates the case for digitalisation, says Mauritius Africa FinTech Hub
While COVID-19 is impacting businesses with lockdowns and physical barriers caused by social distancing measures between stakeholders in the FinTech ecosystem, it is also creating opportunities by accelerating the case for all things digital. This is according to the Mauritius Africa FinTech Hub (MAFH), who celebrated their second anniversary on October 23, 2020 at the Caudan Arts Centre, Port Louis.
MAFH says since their launch, they have touched upon every facet of the industry, including financial institutions, venture capital providers, accelerators and incubators, start-ups and policymakers. The organisation says they are encouraging new developments in this space, attracting new members and partners, and actively making new connections across the globe. The hub believes in open and mutual collaboration.
Commenting on the hub’s second year anniversary, MAFH CEO Michal Szymanski said: “Today, we are celebrating our collaboration together in the digitalisation of the Mauritian economy, where we want to be the catalyst and facilitator. All stakeholders are crucial for Mauritius to become the FinTech island we want it to be.”
“We need a free flow of information and access to the correct information to move in the right direction, and along with the Economic Development Board (EDB), we are ready to address the reality. I believe that having open debates about challenges and possibilities only leads us to find solutions to be the leading FinTech hub,” he added.
Speaking at the event, Acting Chief Executive Officer of the Economic Development Board Ken Poonoosamy said that “FinTech plays a vital role of innovation in our ecosystem. ”
He added that he was very pleased to see the progress that had been achieved to date. In his opinion, the “silver lining” is the way that FinTech, digitalisation and the cloud offering had come to the forefront in COVID-19.
He underlined that the Regulatory Sandbox Licence regime, which is administered by the EDB, had led to approvals for crowdfunding platforms and blockchain systems, among others. He also noted that the Africa FinTech Festival would be hosted in Mauritius in 2021 and that the EDB welcomed such initiatives.
The evolution of the fintech ecosystem
MAFH in partnership with PwC, also revealed the results of the second Mauritius FinTech Ecosystem Mapping survey. The results of the first survey were rolled out in September 2019 after a FinTech ecosystem mapping workshop was conducted, in a concerted effort to map the local FinTech ecosystem and foster better cohesion and collaboration among the key stakeholders of this innovative ecosystem.
The 2020 survey has focused on the evolution of the FinTech ecosystem, challenges, attractiveness of Mauritius and the impact of COVID-19. It was extended to include banks, corporates, technology and academia. There were 140 respondents and 50% were from the FinTech industry.
Diya Guttoo, Associate Director - Advisory at PwC highlighted that “FinTechs are growing to a mature stage in Mauritius,” where most of them were serving the local B2B market.
The survey results showed that 54% of FinTechs in Mauritius have achieved an average turnover up to MUR Rs 5 Million and 63% employ around 10 people. Looking ahead, the survey results identified a need to focus on labs and incubators, data privacy and security, skilled labour force, regulatory environment and ease of obtaining permits and licenses.
The survey showed some positive results, such as the fact that, in the light of COVID-19, there was a 25% increase in demand for FinTech products and services, 22% of fintechs launched new products and services, there was a 16% increased resiliency of respondents’ business model, a 15% increase in collaboration with corporates and 15% faster response to market needs.
The hurdles to be overcome included 23% greater legal and compliance risks, 23% increase in price competition, 13% faster transition to subscription model, 20% greater information security and privacy threats and 12% loss of market share.
On a concluding note, three MAFH members shared their journeys, namely Fundkiss, MIPS and the Mauritius Commercial Bank. Fundkiss CEO Paul Perrier explained that the aim of Fundkiss, which launched four years ago, was to “simplify and democratise funding for SMEs,” and that the company was now partnering with the SME Equity Fund, which would help them cater for the large market potential.
He noted that changing the way that SMEs and entrepreneurs finance themselves would allow entrepreneurs to “create the world of tomorrow”.
Director and Founder of MIPS Payments Sebastien Le Blanc explained that the purpose of MIPS was in “connecting worlds” of the different players in the ecosystem, such as merchants and software providers, and noted the enabling role of MAFH.
MCB COO Vincent Chatard commented that MCB had joined MAFH recently as “we want to be part of this key ecosystem”.
He explained that MCB had launched its Digital Factory in June 2018 as an incubator for new ways of working. He highlighted that MCB was taking a number of innovative steps forward by working on open banking, introducing Juice Pro for SMEs this year and making it easier to open business bank accounts, among other initiatives.