Webinar Key Takeaways: Is Embedded Finance the Future of Fintech in Africa?
Did you or a friend miss this insightful event? Here you will find a link to the recording of the webinar. https://www.youtube.com/watch?v=9GaSAPfYgck
Our panelists included our CEO and Founder, Hilda Moraa, CEO and Founder of Lami Insurance, Jihan Abass, Founder of Frontier Fintech, Samora Kariuki, Head of Digital Services at Twiga Foods, Philip Moturi and Fintech Executive, Eric Méniere. The discussion was moderated by Summer Fellow, Elisabeth Di Domenico and Principle of Consonance Investments , Lamide Adeosun. in viewership of 195 attendees began with Lamide Adeosun providing a concrete framework for embedded finance.
What is Embedded Fintech & Macro Trends Propelling Industry Growth
Lamide defined embedded finance as “Non banks offering financial services products beyond payments directly in user sales channels.”
Eric took to expanding on the term by highlighting how essential technology is to accelerate the delivery of embedded finance in many different contexts and applications. What is important in expanding this practice is the affordability piece. There needs to be a combination of internet access, mobile devices and API’s in every industry for the benefit of Africa as a whole.
While our webinar worked with a set definition of embedded finance guided by our moderators and experts, depending on the sector and moving from industry to industry this definition can vary.
Different Industry Sector Perspectives on Embedded Finance & its Benefits
What was particularly illuminating and unique about this webinar was the diverse set of perspectives our panelists offered. Jihan and Hilda were able to speak to their respective sectors of lending and insurance, Philip spoke to the partnerships perspective of the industry, whilst Samora and Eric brought the expertise on a macro level including the relationship between fintechs and banks whilst looking to the future.
Lending Use Case by Pezesha:
Hilda enlightened the attendees on the lending embedded finance sector particularly to the acceleration in the adoption of Pezesha’s lending infrastructure in value chains looking to address working capital needs for their customers to survive and thrive during the current COVID-19 period. Pezesha has built a lending infrastructure that allows anyone and institutions to plug embedded lending through APIs and at the same time ensure productive use of funds and reduced credit risk through collections at source. Pezesha has integrated with various partners across sectors i.e Twiga Foods, iPay, Jumia, Zumi among others.
To learn more visit https://pezesha.com/supply-chain-finance
Supply Chain & Distribution Use Case by Twiga Foods:
Philip contributed to the conversation by providing the partnership perspective of Twiga Foods. It is an imperative function to have payments embedded in the customer journey, more specifically lines of credit embedded in the entire customer experience. Without it, Twiga Foods would not be able to manage their tens of thousands of customers due to the inefficiencies of high costs and operational headaches. As well, this applies strongly on the vendor side.
Insurance Use Case by Lami
Providing the insurance sector perspective, Jihan discussed specifically how Lami is leveraging embedded finance and stepping out of the traditional insurance practices that have dominated the past 70 years. Lami uses their APIs to target digital platforms looking to use insurance products as a retention tool, or standard monetization. All with the mission of making the purchase of insurance seamless. With COVID-19, there has been an equal shift in both the insurance perspective and the digital platform perspective because companies are delving into the diversification of their revenue streams.
Banking Use Case by Samora
Bringing in the banking perspective, Samora spoke to the generalized outlook banks have on embedded finance. What was first a reserved and stagnant position, banks are now forced to act as the industry is evolving due to the advancement of technology. Embedded finance is a modern method of distribution. It enables finance to be obtained at exactly where it is needed through trading platforms, social platforms, etc. Banks that embrace this mindset will succeed in the long run while also expanding their balance sheets. Rather than shying away from these potential partnerships , banks and fintech need to collaborate. This will drive more growth, decrease cost and increase revenue. This will empower and sustain the future of embedded financial services, which will further its future in Africa.
The Future of Embedded Finance
In closing, we posed the question “Do you believe embedded finance is the future of fintech in Africa?” to the attendees. 86% answered yes and 14% responded no. Only time will tell if embedded finance is the future of Africa, but here at Pezesha we are confident that embedded finance will prove itself to be the future of Africa as we continue to see a trend where more value chains are being aggregated and formalized in Africa as consumers demand a seamless user experience to accessing financial services.
Eric closed our webinar advocating strongly for the future of embedded finance in Africa as he spoke to witnessing embedded finance’s inception to its present. If regulators were to come in more rapidly, it would aid in sealing embedded finance’s idyllic future by implementing solutions that are meaningful for customers. While technology is accelerating growth, there are things that take time. Two milestones that are essential for the future of embedded finance is solving identification and providing low cost and high speed data connections. Responsible development and partnerships are fundamental.
If you would like to continue with this conversation or learn when we have future webinars on this or related topics, do follow us on Twitter @PezeshaAfrica and Linkedin here to continue the conversation with us using #embeddedfinanceafrica