As players in the fintech space gather for the FITSPA conference this October, funding will be top on the talking points as well as issues to do regulation, digital trade and green finance.
The FITSPA Annual Fintech conference is scheduled for October 13 at Sheraton Kampala Hotel and will run under the theme “Investments and Partnerships” – How to Thrive in Uganda’s FinTech ecosystem and beyond.
Access to funding/capital remains an immense obstacle for many Fintechs, especially in developing and emerging economies like Uganda. Most of the fintechs are self-funded, with minimal investment from other funding sources such as venture capital, private equity, and others.
“There are few members who are already accessing funding. aBi is one of our main partners. Instead of money growing through traditional banking institutions, we now have an opportunity for our members who are incubating to have access to funding so they can take their products to market,” Kevin Wavah, the Vice Chairperson FITSPA Board said during a recent press conference.
He said a huge chunk of the funding coming into the African continent has been going to bigger markets like Egypt, Nigeria, South Africa and Kenya.
“The ecosystem is still small. Some of our startups are not yet where the VCs want them. So, it’s been a slow painful process to get them prepared. That why at the Innovation Village, we created the Angels Investment Network, to encourage investors to invest in ready-to-be-invested-in startups,” said Sharon Kakai, the Marketing and Communications Lead at Innovation Village.
During the October conference, Financial Technologies Services Providers’ Association (FITSPA) will launch The Deal Book, an initiative that will profile the different VCs and help match them with products (fintechs) they are looking for.
Last year, aBi Development Finance committed to support FITSPA members in Agritech, VSLAs, and SACCOS by giving them access to market and support around funding needs.
Still in regards to funding, Bill and Melinda Gate will over the next 5 years support the regulatory framework and inclusion of women as strong players in the Fintech sector.
Ugandan startups Ensibuko, Tugende and gnuGrid also managed to raise US$ 1m, US$ 9.9m and US$ 612,500 respectively.
The equity capital from Pan African specialist investment financial institution Verdant Capital will strengthen Tugende’s loan portfolio.
Having built its initial position financing boda bodas in Uganda, Tugende moved on to launch its Kenyan operations in late 2019, kick-starting its regional expansion, while continuing to add new asset products for other types of informal sector clients.
Ensibuuko’s US$ 1m funding from FCA Investments is a boost to the startup that currently provides digital financial services to over 200,000 rural customers in Uganda.
The vast majority of venture capital in Africa is shared among only four countries: Nigeria, Egypt, South Africa and Kenya.
According to the African Development Bank’s 2021 report, these four countries account for about a third of the continent’s start-up incubators and accelerators and receive 80% of foreign direct investment (FDI) into Africa.
In part, lion’s share taken by the four countries compared to the rest of the continent, is attributed to their large economies and sizeable populations.
Majority of Uganda’s fintech composition is in the payments segment while the others are investment and savings, insurance, bank infrastructure, e-commerce, remittances and lending. Currently, there are 189 registered members (fintechs) under FITSPA, the umbrella body for fintechs in Uganda.
Mobile money (in 2009) remains by far the biggest fintech disruptor in Uganda. Other players like Jumia, Safe Boda, Pegasus, Interswitch, Payway, ClinicPesa, Xente among others have since launched. And so have the different regulatory frameworks.
