How FinTech Can Help Financial Inclusion In West Africa Mauritania

In Mauritania, in West Africa, access to basic financial services isn’t easy at all, and approximately 70% of the total population of 4.3 million (approx) don’t even have a basic current account. However, the current government is really keen to improve the financial inclusion of their citizens. And FinTech companies, as a matter of fact, are the ones that should be seek here as they hold the key to cheap, accessible and safe banking, with little fees to pay and almost no infrastructure to account for. In fact, one first crucial step has been already done by Mauritania, where  mobile phone penetration reached 92.2% of the total population in 2017, according to the World Bank, 9.69% more than in the previous year. Moreover, population penetration of 3G is relatively high compared to other African countries. Mauritanians have mobile phones and internet connection, the two basic requirements for Fintech to be introduced. With this already sorted, it is the moment when the Government must step in and act. As such, the country has started, through its National Central Bank (Banque Centrale de Mauritanie, BCM) a series of reforms that might speed up things a little bit. First off, they have just undertaken a massive monetary reform, with the release of new polymer-based notes and a demonetisation at a rate of 1 to 10 included. Secondly, actions to attract international players and financial companies. 

For it, the Central Bank of Mauritania has started a campaign to attract new Fintech players into the country. The BCM Fintech Challenge, for example, is about to announce the winner of the project. This company will work hand-in-hand with the government and the national institutions to create an ecosystem made of dynamic, disruptive and high-potential partners and accelerate the country’s transformation by staying in tune with their ecosystem and creating a constructive dynamic in favour of their citizens. This very first Fintech Challenge is a good step forward for an until-now dormant country. It aims directly to palliate the country’s lack of financial infrastructure and banking services and build up a healthy and inclusive new ecosystem from five different main pillars:

• Financial Inclusion: To reshape the financial sector through digital access at an affordable cost, to allow easier access to formal financial services by populations who until now , have been excluded from or not adequately served by the banking system.
• Fintech Development: To create a disruptive and dynamic ecosystem of high potential partners, in order to offer them access to new markets, a dedicated business accelerator, a suited follow-up and a certified expertise.
• Improving the quality of financial services: To stimulate digitalization in favor of the growth and improvement of quality, cost and efficiency of financial services.
• Embracing disruptive technologies: To encourage disruptive innovations in the financial sector by implementing new services pertaining to BlockChain, Big Data and artificial intelligence.
• Cashless Society: To drive economic development, the protection of consumers from financial services , the fight against money laundering and the financing of terrorism by gradually moving away from cash in favor of the dematerialization of transactions.

There are already Fintech players working with the Mauritanian government and financial authorities to develop this new financial ecosystem. One of those is blocksdna, which is building an blockchain-based mobile app that brings support for crypto and FIAT wallet, payments, digital ID, and a marketplace. Its main purpose, as the company puts it, is to facilitate simple and fast communication between companies and their clients, making them as smooth and hassle-free as they can be. To do so, it features a state-of-art back-end platform with the latest AI technology. In Mauritania, they are working already to start deploying a customized version of the white label technology to promote electronic payments and financial inclusion in the country.

The Long Road Ahead

However, this is just the first step and there’s much left to do, and improve. From a legal standpoint, the country lacks of regulatory frameworks aligned with international standards and until this is taken care of, not much can be done by FinTech companies who want to be part of the financial revolution. Abdel Aziz Ould Dahi, Governor of the Central Bank of Mauritania, shares this opinion in a recent interview, though he feels optimistic about the future:
 

“The review of the legal framework will very soon become a reality with a new law on means of payment enabling the emergence of new players, especially financial intermediaries for retail payments. We are also planning to create a National Payment Centre (NPC), made up of all the stakeholders, which will be a key element in the process of modernising the banking and financial system in Mauritania.”

“As for adopting new legislation, the expectations of citizens, employees and economic players, relations with partners and compliance with international norms and standards are just so many parameters to be taken into consideration in this much-needed transformation.

We have also adopted a roadmap consisting of more than 40 projects that affect all of the bank’s fields of activity (processes, functions, monetary policy, fiduciary management, governance, organisation, information systems, investment in human capital, etc.). The goal is of course the in-depth transformation of the management systems and processes and the organisational structure of the Central Bank through radical, but gradual, reforms to improve its performance over time,” he continued. Mauritania has started a process that can’t be undone and, if it wants to develop itself as a country and improve the citizens’ overall welfare, it needs to keep rowing in that direction. Because unfortunately, the path ahead is still long and tough. Their neighbours, for example, suffer it. In some African countries, especially those found in sub-Saharan Africa, most people can’t even open a bank account or they see it as just another luxury commodity they can’t afford. Branches are too few in numbers and too spaced out to be really useful and the cost of having a current account are prohibitive for many. It is thought by the World Bank that more than 350 million Africans don’t enjoy financial services at all.