For many outside Botswana, the southern African nation is often associated with diamonds rather than technology. Despite ongoing efforts by the government and private sector to advance digitalization, Botswana’s tech ecosystem remains in its infancy.Data from Disrupt Africa indicates that the country has only one fintech startup. However, the presence of multinational banks, telcos, and high internet penetration rates suggest the financial services sector has untapped potential for fintech growth. With only 45% financial inclusion, according to Statista, the success of financial technology could be transformative.In this nascent landscape, organizations like the Fintech Association of Botswana are striving to create change. Established in 2020, the association aims to provide a consolidated platform to address the needs of fintech players, including banks, insurance companies, telcos, startups, and regulators.Recently, the association elected a new leadership team to drive its mission forward. We spoke to Tavonga Muchuchuti, the new president, to better understand Botswana’s fintech landscape and how the association plans to shape its future.
The Mandate of the Fintech Association of Botswana
Tavonga Muchuchuti: The association’s initial mandate was to facilitate the creation of a fintech ecosystem in Botswana, which was virtually non-existent at the time. The goal was to empower stakeholders across the spectrum to connect and collaborate.Botswana’s fintech space includes not just disruptive startups but also mobile money operators, insurance firms, banks, and regulators. Bringing these diverse parties together is essential for creating frameworks that enable innovative financial products benefiting consumers.
Catalyzing Innovation in a Dormant Ecosystem
Q: Botswana’s fintech ecosystem, especially its startups, has seen limited activity. How does the association plan to stimulate innovation?
TM: When we began, we wanted to understand the obstacles hindering ecosystem growth. We identified three key issues:
1. Lack of Funding: Many fintech firms lacked the financing needed to launch their solutions. With a total addressable market of just over 2 million people, convincing venture capitalists of the scalability of local solutions was challenging.
2. Regulatory Hurdles: Collaboration with banks was essential, but startups struggled to present strong business cases without a sandbox for piloting and testing their products. This gap complicated partnerships and slowed innovation.
3. Inhibitive Environment for Established Players: Even established institutions like banks and insurers faced challenges due to excessive regulatory red tape, limiting their ability to develop innovative products.To address these issues, the association has been actively engaging with regulators to create frameworks that foster innovation. Over the next three years, this will be a major focus.
Planned Initiatives
Q: What initiatives are planned to address these challenges?
TM: When the association was first formed, it wasn’t formalized—it began as an informal network, active primarily via WhatsApp groups. Over time, we registered the association, started engaging stakeholders, and joined both the Africa FinTech Network and the Digital Finance Network.
Now, we aim to build on this foundation:
1. Regulatory Sandboxes: Agreements with key financial regulators will allow members to test products in a controlled environment. This will help identify potential risks while enabling collaboration between regulators and innovators.
2. Advisory Committees: Drawing on our members’ expertise, we’re establishing a committee to guide institutions on adopting best practices in fintech.
3. Matchmaking Between Startups and Incumbents: There’s a clear gap in the market. Established players want to innovate, but smaller startups already have solutions that could address these needs. We plan to bridge this gap, fostering collaborations that benefit both sides.
Through these efforts, the Fintech Association of Botswana is working to create a more vibrant, collaborative fintech ecosystem. As the nation strives to diversify its economy and improve financial inclusion, the association is positioning itself as a catalyst for transformation in the sector.
