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In everything we do, Ozow is driven by our commitment to improve the lives of all South Africans. By enabling all South Africans to have access to the digital economy, we provide an alternative access point for economic actors.
In today's ever-evolving global landscape, fintechs have emerged as key players in driving economic growth, particularly in developing economies. Companies such as Ozow are revolutionising the way individuals and businesses access and manage their finances.
By leveraging cutting-edge technology and providing convenient and inclusive financial solutions, fintechs are facilitating economic development and empowering underserved communities.
Here’s how fintechs are driving growth in developing economies.
Expand financial inclusion
Fintechs bridge the financial gap by reaching underserved populations that are often excluded from traditional banking services.
“Payments are critical levers for economic growth, as well as digital and financial inclusion,” says Jan Pilbauer, former Chief Executive Officer at BankservAfrica. He goes on to mention that “If these modern initiatives form part of a bigger national initiative and are championed at governmental and regulatory level, phenomenal results can be achieved.”
By leveraging digital platforms and mobile technology, fintechs provide accessible and affordable financial services, such as mobile banking, digital and peer-to-peer payments, remittance and microfinance. This increased financial inclusion enables individuals and businesses to participate in the formal economy, stimulating economic growth and reducing poverty.
Accelerated access to capital
The credit gap in sub-Saharan Africa is estimated at between $80 to $100 billion.
Fintech platforms are revolutionising lending processes by introducing fast electronic funds transfer (EFT) payments, and providing quick and efficient access to capital for individuals and small businesses.
By utilising alternative data sources, such as transaction history, social media activity, and digital footprints, fintechs are able to assess their customers and provide products and services that speak to their needs.
This access to capital enables entrepreneurs to start businesses, invest in productivity-enhancing technologies, expand existing ones, and drive innovation. These all lead to job creation and economic expansion.
Streamlined digital payments
According to Paystand, digital wallet users will exceed 5.2 billion globally in 2026, up from 3.4 billion in 2022, representing strong growth of over 53%. This unprecedented uptake in digital wallets has created a massive opportunity for fintechs to accelerate market penetration by enabling greater economic participation.
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By simplifying and digitizing the payment process, fintechs like Ozow reduce reliance on cash transactions and enhance economic efficiency. These payment solutions and digital wallets also enable individuals and businesses to transact seamlessly in remote areas with limited banking infrastructure.
Forbes reports that the very nature of digital wallets empowers businesses to streamline business processes and overcome many common payment and expense management challenges.
Streamlined digital payments contribute to increased business productivity, reduced transaction costs, and improved financial transparency, fostering economic growth and reducing the risks associated with cash-based economies.
According to a report by the Alliance for Financial Inclusion (AFI), digital payments are now, more than ever, the key to unlocking business growth and financial inclusion.
Innovative solutions for financial services
Fintech companies leverage technology to offer innovative financial services that address specific challenges in developing economies. For example, Ozow, being a leading fintech in South Africa, provides a secure and convenient payment platform that allows businesses and consumers to transact effortlessly.
Our solutions enable businesses to accept online payments and expand their customer base, while consumers can enjoy a seamless and secure payment experience, promoting economic growth through increased business activity and consumer spending.
Ozow Payouts enables a fast and seamless withdrawal process. For equity traders, gaming companies, and subscription-based businesses our Payouts product transaction value has grown month-on-month by at least 55% and has not shown any signs of slowing.
Job creation and economic stimulation
The rapid growth of fintechs in developing economies leads to indirect and direct job creation across various sectors, including technology, finance, customer service, and sales.
Direct job creation
Fintech companies require a skilled workforce to develop, maintain, and support their digital platforms, contributing to employment opportunities and skills development.
According to a report by McKinsey, fintech in Africa has the potential to create up to 3 million new jobs by 2025.
Indirect job creation
Increased economic activity resulting from fintech adoption also stimulates demand for goods and services, benefiting local businesses and contributing to overall economic growth.
Ultimately, fintechs play a transformative role in driving growth in developing economies. Through enhanced financial inclusion, accelerated access to capital, streamlined digital payments, and innovative financial solutions, fintech companies are empowering individuals, businesses, and communities.
We use technology to help overcome these financial barriers and provide financial services to people who would otherwise be excluded. We’ve achieved this by leveraging technology and providing convenient and inclusive financial services. Fintechs are unlocking economic potential, reducing poverty, and driving sustainable growth.
FAQs
1. How do fintechs promote financial inclusion?
Fintechs bridge the gap by providing accessible and affordable financial services like mobile banking, digital payments, and microfinance to underserved populations often excluded from traditional banking. This enables more people to participate in the formal economy.
2. How do fintechs accelerate access to capital?
Fintechs use alternative data like transaction histories and digital footprints to assess creditworthiness. This allows them to efficiently provide loans, financing, and capital to individuals and small businesses, enabling entrepreneurship, investment, and economic expansion.
3. How do digital payments drive economic growth?
Streamlined digital payment solutions from fintechs reduce reliance on cash, increase business productivity through process efficiency, lower transaction costs, and improve financial transparency. This contributes to overall economic growth.
4. What innovative financial services do fintechs provide?
Fintechs leverage technology to address specific challenges with innovative solutions.For example, Ozow provides secure online payment platforms for businesses to expand customer bases and enable seamless consumer transactions.
5. How do fintechs create jobs and stimulate economies?
Fintechs directly hire skilled workers but also indirectly drive job creation through increased economic activity across sectors like technology, finance, and customer service. This stimulates demand for goods/services and boosts growth.
6. How does Ozow contribute to the South African economy?
Ozow enables all South Africans to access the digital economy by providing secure and convenient payment and payout solutions for businesses and consumers. This drives financial inclusion, business growth, and consumer spending in the economy.
