Fintech Snacks 🍿 | June 11 2023
My job is to make sure your reading list on African fintech is lit 🔥
Hey peeps,
It’s raining cats and dogs in Lagos, Nigeria!
I used to absolutely love rain, but these days I’m starting to have mixed feelings about it. On the one hand, I love the rainy season because it means CORN season. But on the other hand, because Lagos is basically a slum with a few tall buildings here and there, heavy rain usually leaves a terrible stench in the streets for weeks 😭
Anyways, a warm welcome to all new and old subscribers to Fintech Snacks 🍿,
Each week, I’ll round up three of my favourite fintech articles, reports, podcasts, webinars etc., covering a trend in Africa’s fintech scene. No deep dives here, just a list of recommended reads. I’ll be kind to your inbox and keep the content short and to the point.
Here’s what I got up to this week 👇🏾
#1: 🤖 Notadeepdive’s Musings on Senegal
Muyiwa is generally always a thrill to read, his humour and acute insights are always refreshing.
In this piece, he reviews his experience using Wave, a popular digital wallet in Senegal (definitely a country on my bucket list ✈️). I’ve always been quite curious about Senegal because it’s an outlier among other major African fintech markets because it’s ‘mobile wallet’ led as opposed to ‘mobile money’ (in Ghana, Kenya, Tanzania, Uganda) or ‘Cards’ (in Nigeria and South Africa)
It’s also pretty interesting to see that QR codes are a big part of how Wave is used, given all the scepticism QR receives about not being indigenous to the African setting (at least compared to a country like China).
#2: 🤖 Fintech Business Weekly breaks down Affirm’s FY Q3’23 earnings
Affirm is definitely not an African company. They are a US-based Buy-Now Pay Later company.
I was drawn to this piece because I’m frequently asked, “Do you think BNPL can be profitable in Africa?” A very tough question to answer since it’s still early days for BNPL on the continent. But one thing that makes it more difficult to answer is the lack of financial data on African BNPL players, as most are private companies.
So I couldn’t resist the opportunity to dig into Affirm’s financials to get a general idea of the key cost elements and revenue streams that drive profit for a BNPL company. Again, I may be shooting myself in the foot for doing this because the US and Africa are wildly different markets, but data beggars can’t be choosers.
Two things caught my interest while reviewing Affirm’s financials:
Affirm is trying to reduce its revenue dependence on merchant fees by offering virtual cards. This makes me worry about the current fixation on zero-interest loans that I see with Nigerian BNPL players. Is that sustainable?
Tech & data analytics costs were almost as high as direct loan-related costs (Tech: 23% vs lending costs: 26%)
#3: 🤖 Newcomer’s 14 Charts that tell the story of AI right now
I genuinely think AI is super cool and will help make financial solutions (especially fraud) several degrees smarter. But I rarely read up on AI because I quickly get lost in all the technical jargon that’s thrown around.
I got excited by this article because it just summarizes the key trends that happened in the past year. Yes, I’m lazy, give me the headlines and keep it moving, lol.
On a sadder note, though, it’s disheartening to hear about all the deep research and development into AI and realise Africa is left out of the race. It means we’d likely be passive importers of solutions that don’t account for our local nuances.
Alright folks, I need to shut down now and go prep for movie night with the hubs. My fintech brain shuts down now.
Make some magic this week,
Nchy 😊
Disclaimer: All content in this newsletter solely reflects my views and opinions. They are not a product of any sponsored ads. Nor are they associated with my current employer.