Fintech Festival in Africa Advocates for "Passporting" to Enhance Cross-Border Growth in Fintech Sector
In the heart of East Africa, the East African Community organization serves as a platform for lobbying efforts aimed at fostering growth in the fintech sector. This push for progress is inspired by the success of similar models in regions like the European Union, offering a positive sign for the African fintech community.
The concept of passporting, a regulatory approach that could simplify the licensing process for fintech companies operating across the continent, was highlighted at the recent Africa Fintech Festival. This event, which drew over 500 participants, including regulators, industry leaders, and fintech entrepreneurs, concluded with a call to action for all stakeholders to collaborate on creating a more conducive regulatory environment for fintech innovation.
At the heart of passporting is the idea that regulators in various African countries would recognize and trust fintech licenses issued by other African nations, reducing additional regulatory obstacles. This model, if effectively implemented, could significantly reduce redundancy and inefficiencies that currently hinder fintech companies trying to expand their services across the continent.
However, concerns have been raised about differences in regulatory frameworks, technological infrastructure levels, and readiness of countries to adopt passporting. Key speakers at the festival emphasized the need for a harmonized regulatory approach and increased cooperation among African regulatory bodies to address these concerns.
Advocates of passporting argue that it represents a form of smart regulation, fostering innovation and growth while maintaining essential oversight. Supporters like Sebie Salim, Co-Founder of Eclectics International, propose advocating for continent-wide passporting through the African Union or regional collaborations similar to those in West Africa.
Leon Kiptum, Senior Vice President for East Africa at Flutterwave, expressed his support for passporting, suggesting a standardization of regulatory requirements for fintechs in Africa. Kagisho Dachabe, President of the Fintech Association of South Africa and Africa Fintech Network Board Member, stresses the need for a concerted effort from all stakeholders to standardize regulations and ensure mutual trust and cooperation for passporting.
Salome Kimani, a Consultant at CGAP, stated that passporting could lower costs and complexity of compliance, hasten the deployment of innovative financial solutions, and increase financial inclusion. Adrian Pillay, VP Sales at Provenir, emphasizes that passporting provides a practical solution for fintech companies, allowing them to focus more on innovation and customer service rather than regulatory compliance.
As Africa positions itself as a global fintech hub, passporting could play a crucial role in unlocking the continent's full potential. With the potential economic advantages of passporting, such as increased investment, job creation, and enhanced financial inclusion, it's clear that this model could be a game-changer for the African fintech landscape.
However, for passporting to take effect, central banks in Africa need to communicate and agree on standards. Fintech lobby groups like the Africa Fintech Network could potentially help to shape these standards. Several African countries have discussed the deployment of a passporting model for fintech companies, with some countries already participating in pilot implementations, but specific countries involved are not yet identified.
In conclusion, the Africa Fintech Festival marked a significant step towards a more collaborative and innovative fintech landscape in Africa. With the support of key stakeholders and a unified approach, passporting could be the key to unlocking Africa's full fintech potential.
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