In 2020/2021 I had the pleasure of working with The Worldbank to evaluate small businesses that were eligible for funding. The most heartbreaking thing is that 90% of the businesses we evaluated had no creativity to them, no innovation, no disruption of existing industries just copy-catting of existing ideas.
Ideation is not difficult. The best ideas come from the simplest of problems. You just need to look around you, see something that is a pain point for you or those around you and find a clever way to fix it either through technology or other ways.
The Fintech space is still very new in Africa. The pie is very huge and can be shared and there is room for multiple startups. For example, mobile payments are one of the most exciting startup ideas in Africa right now. There is rising smartphone penetration in the continent with more people using their mobile phones to make payments for goods, services, and investments.
Mobile payments have then opened up other complementary industries that with great research, development and innovation, can be turned into Billion Dollar companies. These are:
- Local & International Money Transfers: There is still a huge gap in the transfers space because there are a few players and the biggest ones, especially in Kenya are heavily reliant on the Simcard.
- AML KYC: The current systems are mainly built for traditional banking which the world is moving away from. Robust Anti-money laundering, Fraud detection and Know Your customer systems built for digital banking and money transfers are a Billion Dollar opportunity
- Virtual credit cards (payments) & Fully Digital Bank: Still on payments as the world moves away from traditional banking, there will be a huge demand for digital banking and management of cards. There are 44,000 banks and credit unions in the world all of which have customers, the pie is big enough for digitization!
- Universal credit scoring platforms: There is a need to create systems that factor in all the money habits of Africans. Africa is still largely cash-heavy. It is hard to assign a credit score to someone who is unbanked. This is still a huge problem that urgently requires solutions.
- Micro-Insurance: Current insurance processes are tedious, hard to understand, and bureaucratic and the premiums are out of reach for most people. You can create a fully digital Micro-insurance firm that caters to the uninsured market.
- Universal Loyalty systems: It is quite annoying to get a loyalty card from each and every lifestyle business one patronizes. What if you partnered with a payments company and created a universally accepted loyalty program?
- Last but not least is the cryptocurrency space which has so many untapped opportunities. This would require a post on its own.
Feel free to reach out if you’re pursuing any of the above ideas and I can help you think through it a bit more. Happy Hunting!