High impact entrepreneurship has shaped financial services in Africa in very distinctive ways, particularly in mobile money.
Developing countries in sub-Saharan Africa are often regarded as behind the curve in developing Western-styled financial services. The very reason for that lag has also spawned the leapfrogging of traditional financial services with new innovations. Africa leads the world in mobile money penetration.
This money revolution is not driven by governments or foreign aid, however. Rather, financial services in Africa are shaped significantly by high-impact entrepreneurs, said Dr Dana T Redford from Policy Experimentation and Evaluation Platform, who runs entrepreneurship competencies programmes and facilitates the development of the European Entrepreneurship 2020 Action Plan, on Monday 27 November.
"We focused our research on discovering successful African financial service companies that have started in the last 10 years and grown to be market leaders in their countries and regions. The spirit of optimism and ability to execute are among the key traits that make for successful entrepreneurs and drives them to provide financial products to a growing market that is in need of these services," added Redford.
Dr Redford was speaking at the launch event of the book "Developing Africa's Financial Services: The importance of High Impact Entrepreneurship," which he contributed to and edited. The event was held at JIAS, a research centre of the University of Johannesburg.
"The history of financial services in Africa illustrates the evolving context of formal banking," said Prof Grietjie Verhoef, Professor in Business, Economic and Accounting History, University of Johannesburg, who contributed "The rise of financial services in Africa" to the book.
"The dual nature of business activities only converged towards the end of the twentieth century and it is in this context that high impact African entrepreneurship emerged. This is the focus of the book," she added.
"High-impact entrepreneurial finance is mobile, easily accessible and relationship-based. New finance occurs less frequently in corporate head offices, and more often in networks aligned to sound governance. High-impact entrepreneurial banking action stays close to the end-user, resulting in small businesses that grow significantly and contribute job-growth to the economy", she said
Concluded Prof Verhoef: "This high-impact entrepreneurship is characterized by the superior understanding of the African market, the culture of business in Africa and the opportunities to grow enterprise and employment. This book engages with such entrepreneurial financial institutions in Africa."