DIFC sets up FinTech Hive for Africa, others
Are you a fintech entrepreneur and want to commercialise your solutions and products then this is the chance for you to join the FinTech Hive.
The FinTech Hive is a programme set up by Dubai Financial Centre (DIFC) and Accenture, a Global consulting firm, to help young start ups in Africa and the Middle east.
Speaking in a phone interview with Adekunle Aliyu, Dubai Financial Centre (DIFC) and Accenture representatives said the FinTech Hive will start a 12 week ‘accelerator programme’, which will bring together the next generation of 7-12 leaders and entrepreneurs to compete and address the growing needs of the financial services industry, using innovative technology solutions.
They further disclosed that since global FinTech sector attracted over $50 billion in investment since 2010, and that currently the Middle East and North Africa only attract around 1 percent of that investment DIFC Accelerator intends to bridge the gap by creating platforms that will drives innovation and showcases success – identifying leading technology entrepreneurs and companies through a competitive process and then offering them the opportunity to develop, test and modify their innovations in collaboration with top executives from DIFC and regional financial institutions.
What is the programme about?
This FinTech Hive is a private sector backed accelerator with international linkage and is the ‘first in the region’ – being designed around specific current banking and financing needs for fast growing fintech firms to commercialise their solutions and products (through a series of formal design competitions), rather than a generic innovation space. The fundamental aim is to ‘accelerate’ the growth of fintech in the region.
The FinTech Hive will start with a 12 week ‘accelerator programme’, which will bring together the next generation of 7-12 leaders and entrepreneurs to compete and address the growing needs of the financial services industry, using innovative technology solutions. The tech leaders will be mentored by leading financial institutions during this process, allowing them to better innovate and provide tailored solutions for the region’s financial services industry. The 12 week programme will take place on a cyclical basis, each time attracting approximately 10 tech entrepreneurs and leaders, and each time addressing a different regional financial services challenge.
Who are those anchoring the programme?
The initiative is owned by the DIFC Authority, powered by Accenture, and developed in partnership with financial institutions. Emirates NBD and Mashreq will be the first local financial institutions to join the accelerator programme, while HSBC and VISA will be the first international financial services providers.
DIFC is the highest ranked Financial Centre in the MEASA region according to the Global Financial Centres Index.
Who will it benefit?
The global FinTech sector has attracted more than $50 billion in investment since 2010, but currently the Middle East and North Africa only attract around 1 percent of that investment.
The DIFC Accelerator intends to bridge the gap by creating a platform that drives innovation and showcases success – identifying leading technology entrepreneurs and companies through a competitive process and then offering them the opportunity to develop, test and modify their innovations in collaboration with top executives from DIFC and regional financial institutions.
The Accelerator is further demonstration of DIFC’s commitment to providing an internationally oriented FinTech ecosystem that meets the specific needs of the Middle East, Africa and South Asia, in line with Dubai Plan 2021 and the DIFC 2024 Strategy.
Are Nigerians included into this?
They certainly should, given the fact that FinTech is a very promising sector in Nigeria, judging by recent progress presented in the media and in the global finance industry.
Nigeria has exhibited growth in mobile money operations from an average monthly transaction value of $5 million in 2011 to $142.8 million in 2016 (source: ww.finextra.com/pressarticle/67524/nigerian-fintech-scene-expands). Mobile penetration and usage is very high; there is an estimated 150 million active subscriber lines in the country.
Nigeria is clearly considered as one of the big tech clusters in Africa, and Nigeria start-up have focused on developing innovation in the field of remittances, lending and business financiering. There are other very interesting innovations, offering for peer to peer insurance to consumers (in a market where more than 80 percent of the population does not have access to insurance). All these data demonstrate that a Fin Tech accelerator could especially makes sense for Nigerians start up.
How will it grow the economy of your country and others if they are to benefit?
With Dubai being the gateway to US$7.8 trillion in the Middle East, Africa, and South Asia (MEASA), with 70% of people being unbanked, and with some of the highest proportions of young people and entrepreneurs in the world, the potential for fintech to change the face of these economies is enormous. In the context of a 22% exponential growth in the fintech market, the FinTech Hive in the MEASA region provides the final piece in the global fintech puzzle – putting it on par with other world leading fintech cities. With the region facing a $110bn financing gap by 2020, Fintech has yet to realise its potential in this ripe market.
What qualifies one to be part of Fintech Accelerator Programme?
The programme focuses on early and growth-stage companies with at least an alpha or beta technology/product, especially those which will benefit from senior access and relationships at the participating financial institutions. We are also interested in growth stage companies that have a product being deployed outside financial services that are interested in entering this vertical.
What kind of series of formal design competitions are we talking about here?
The accelerator programme challenges will be identified by a Committee currently being set-up. This Committee will be comprised of DIFC Authority, Accenture, and partnering Financial Institutions that will draw on demand/ challenges based on their experience and broader knowledge.
To give you some ideas on challenges being considered, the Committee intends to catalyse the growth and efficiency in a variety of areas including trade finance, alternative finance such as P2P payments, and Sharia based services.
The challenges will be set as a 12 week programme that takes place on a cyclical basis. (Please see response to first question, second bullet point).
What is fintech market? How do you see finch market in Nigeria?
In Sub-Saharan Africa, the improvement of financial inclusion will depend on mobile technology. According to the World Bank, in 2015, 34% of adults had an account and 12% of adults had a mobile money account in the region, which is significant compared to the rate of 2% globally.
Nigeria is becoming a hub for tech investments and commercially oriented start-ups. Even if the country is facing serious challenges, the prospect of scaling applications to Africa’s largest population and economy attracts local and international investors and entrepreneurs.
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