Financial event in Africa encourages "passporting" to foster increased continental growth within the fintech sector
Africa Fintech Festival Highlights Need for Passporting Model to Boost Innovation
The Africa Fintech Festival, held recently, concluded with a call to action for regulators and industry players to collaborate on creating a more conducive regulatory environment for fintech innovation. Panelists emphasized the need for a harmonized regulatory approach and increased cooperation among African regulatory bodies.
In particular, the discussion focused on the potential benefits of the passporting model for fintech regulations. Under this model, fintech companies would comply only with specific local requirements instead of undergoing a complete re-licensing process in each new market. This could streamline cross-border licensing, particularly in regions with multiple fintech markets such as South Africa, Nigeria, Kenya, and Ghana.
However, concerns were raised about differences in regulatory frameworks, technological infrastructure levels, and the readiness of various countries to adopt passporting. To address these challenges, it was suggested that centralized rules and regulations are necessary to manage the effective implementation of passporting.
Advocates of passporting argue that it represents a form of smart regulation, fostering innovation and growth while maintaining essential oversight. 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.
The festival also highlighted the potential economic advantages of passporting, such as increased investment, job creation, and enhanced financial inclusion. Key speakers, including Leon Kiptum, Senior Vice President for East Africa at Flutterwave, expressed their support for passporting and suggested that central banks in Africa need to communicate and agree on standards to implement it.
Sebie Salim, Co-Founder of Eclectics International, suggested advocating for continent-wide passporting through the African Union or regional collaborations like those among West African countries. In East Africa, lobbying efforts can be channeled through the East African Community organization.
Kagisho Dachabe, President of the Fintech Association of South Africa and Africa Fintech Network Board Member, stresses that implementing passporting requires a concerted effort from all stakeholders to standardize regulations and ensure mutual trust and cooperation.
The festival showcased the successful implementation of similar models in other regions, such as the European Union, where passporting has facilitated the flourishing of financial services across member states. Salome Kimani, a Consultant at CGAP, stated that passporting could lower the cost and complexity of compliance and hasten the deployment of innovative financial solutions across multiple markets.
As Africa continues to position itself as a global fintech hub, passporting could play a crucial role in unlocking the continent's full potential. The Africa Fintech Network, led by Kiptum, could help shape these standards. Implementing passporting requires a collaborative effort from all stakeholders, including regulators, industry leaders, and fintech entrepreneurs, to create a harmonized and innovative regulatory environment that supports the growth of fintech in Africa.
