Since the health crisis, 100 billion dollars have been injected into Fintech around the world. For the uninitiated, the term “Fintech” is a contraction of “finance” and “technology”, so it is a question of “financial technology”.
In short, in Africa, only 10 out of 54 countries are interested in Fintech. Of this global investment, these countries drained 1.4 billion dollars (against 1 billion in 2018), Morocco only captured 0.07% of this amount, i.e. less than 1 MDH.
These figures just trace the multi-speed dynamics of this technology across the globe.
The United States and Europe are unsurprisingly the most active regions. In Africa, despite some delay, the Fintech sector is still the most active in the continent’s start-up ecosystem. And for good reason, a high penetration of mobile and the Internet, a young and tech-savvy population, and above all low banking rates. There are, in fact, 350 million Africans who are not banked, a figure mentioned during the webinar organized this week by the CDG Institute and 212 Founders, around the future of Fintech start-ups in Morocco.
The speakers and experts define Fintech as an agility of innovation, whether for a start-up or an already established company. “Much more than an extension, it is a means of distributing financial services where banks cannot or cannot manage to offer optimal,” explains Abdessalam Alaoui Smaili, HPS Managing Director. For Fintech expert Yassine Regragui, “Fintech is often associated with payment, but it concerns all innovative financial services: From insurance to financing (crowdfunding), through purely technological technologies: blockchain, etc.”
Far far away, behind the word mountains, far from the countries Vokalia and Consonantia, there live the blind texts. Separated they live in Bookmarksgrove right at the coast of the Semantics, a large language ocean. A small river named Duden flows by their place and supplies it with the necessary regelialia.
A collection of textile samples lay spread out on the table – Samsa was a travelling salesman – and above it there hung a picture that he had recently cut out of an illustrated magazine and housed in a nice, gilded frame. It showed a lady fitted out with a fur hat and fur boa who sat upright, raising a heavy fur muff that covered the whole of her lower arm towards the viewer.
Is the environment in Morocco conducive to the birth of national Fintech champions?
It is, at least from a regulatory point of view. The environment is very favorable for the emergence of this technology. The idea of a regulation is that it does not advance before the object of this regulation, but that it is not a barrier of entry. And that’s the case! We now have the necessary tools to upgrade start-ups to the stage of national champions, agree to say the speakers. The adoption by Bank Al-Maghrib of Law 103-12 is a concrete example, allowing non-banking services (notably telecom operators) to offer payment solutions ending the monopoly of banks to promote financial inclusion. In the same vein, the Kingdom is one of the only countries on the continent to make many efforts to pass a law facilitating the activity of crowdfunding. Jean Michel Huet, Bearing Point partner, affirms that there is “a real desire on the part of the central bank and the ANRT to constitute a single platform around mobile payment, and to allow each of the players to propose a according to its position.
But if all the elements seem to come together to allow the development of a successful Fintech ecosystem in Morocco, the sector is still struggling to take off. Why?
This could be explained by a less incessant need for the Kingdom, compared to other African countries which suffer from a very low banking rate, particularly in sub-Saharan Africa: Fintechs are almost a necessity for these countries. Remember that the banking rate in Morocco is around 80%.
For Mr. Huet, a new means of payment is not carried exclusively by marketing, the sociological aspect has a lot to do with it too. And when it comes to paying, the Moroccan is very fond of cash. A whim that is expensive, very expensive even, since the cost of cash today represents 0.02% of Morocco’s GDP.
How to cure it? By cultivating public trust. The major players must embark on these uses. “The Moroccan will launch, if he sees in the future his bank, the traders, the telephone operators and why not the State, to use these means there”, affirms Mr. Regragui.
To explain this start-up of the Fintech which still does not manage to take, Mr. Smaili, him, questions the mindset of certain project leaders. “Innovation is not just a good idea. Rather, it’s the whole journey from idea to market launch. Knocking on every door, looking for financing and having this culture of ” fail fast ”, that’s what most of these young shoots lack.
Is Fintech a real threat to banks in Morocco?
Why go to the counter if you can make a transfer from your phone? Why fill out bank loan application files if you can find financing in a few clicks? By facilitating, among other services, this relationship with money, Fintech can be perceived as a threat to the bank. Is she really? The emergence of Fintech, and non-financial players who offer direct, fast and inexpensive means of payment, calls into question the role of “intermediary” played by traditional players. It is therefore necessary for them to modernize their infrastructures, an opportunity for them to reinvent themselves and regain long-term growth.
For Abdelhakim Agoumi, Director of the Customer Service and Alternative Channels Division within the CIH, the transformation of technological use is in no way perceived as a threat, but rather an opportunity to improve. “Technology has dramatically changed the customer journey. The transformation of uses has pushed the bank to bring the transaction closer to the customer and to finally realize that the physical point is not the best solution. In this configuration, the bank itself has positioned itself as a Fintech,” he explains. Sharing the same opinion, Mr. Regragui adds that “the user is more and more demanding, asking for more services from his bank which is being pushed to change its business model. “With the advent of open finance, banks today offer so-called beyond banking or extra-financial services by collaborating with brands such as Airbnb, Uber, etc.”
