A Major Acquisition
Africa’s leading payments processor, Flutterwave, is acquiring Mono, an API-driven fintech platform that has gained significant traction since its founding five years ago. This move aims to reshape how creditworthiness is assessed in the absence of standardized credit scores across Africa.
Expanding Services and Reach
Mono’s APIs are integral to Nigeria’s digital banking system, connecting a substantial portion of it. Flutterwave, on the other hand, facilitates payments in over 30 African countries. The acquisition will broaden both companies’ service offerings and reach.
Critical Impact on African Markets
This open-banking-based partnership is particularly significant in Africa, where consumers often lack standardized credit scores. Limited credit bureau coverage means lenders traditionally rely on bank transaction histories for credit evaluations.
Regulatory Promotion of Financial Inclusion
According to Mono’s CEO Abdulhamid Hassan, Africa is currently undergoing a pivotal phase where regulators are increasingly supporting lending initiatives aimed at enhancing financial inclusion. These efforts not only benefit consumers but also provide substantial opportunities for banks and businesses.
New Opportunities and Business Potential
A research report from Galileo indicates that approximately half of global financial leaders surveyed have estimated losing 10% or more in potential business due to the absence of truly inclusive technology. This underscores the importance of open banking, especially through APIs provided by third-party vendors.
Inevitable Adoption of Open Banking
The adoption of open banking is driven by its inherent benefits such as flexibility and security. Despite varying rates of implementation across different markets, the paradigm shift towards open access via APIs for data and account information is irreversible.
As James Wester from Javelin Strategy & Research highlighted: “The concept of having API-driven access to data and accounts isn’t going away. The way regulations are crafted or market dynamics evolve may influence its specifics, but at its core, this open-banking model where users have access to their bank account data will continue.” Customers across segments—from individual consumers to small businesses and commercial clients—desire such access.
