Danger of selling fintech as answer to Africa’s problems
The online financial products and services known as “fintech” have become deeply embedded in the economic and social life of many African countries over the past decade. Headlines across the continent often extol fintech’s virtues. Technology is “driving financial inclusion” and “making life better for people”. It’s helping “consumers to manage inflation”.
Fintech is “too sweeping to ignore”. And, if it’s not embraced, “the country and the entire economy will be left behind”. These headlines depict a popular story about fintech: it is the answer to several of Africa’s economic problems. This story is also appearing in policy documents in countries like Uganda.
Fintech is a key component of the country’s National Financial Inclusion Strategy 2023-2028.
However, a counter-narrative is emerging. Political economists, anthropologists and social theorists warn that fintech is an example of an exploitative, neocolonial and racialised form of platform capitalism, a system by which a fairly small number of commercial networks profit from user activities and interactions. They caution that it is inherently anti-development.
It is, they say, likely to cause a crisis of consumer debt, emotional distress, self-harm and data piracy. We wanted to know how the press in Africa reports on fintech. Are its failings and potential pitfalls acknowledged?
So, in a project we began two years ago with South African political economist Scott Timcke, we set out to answer these questions. This kind of analysis helps reveal how public attitudes about this new pillar of everyday economic life are formed.
Our analysis, the first to look at how the fintech story is being told in the African press, reveals that the coverage is celebratory and offers limited cautionary and critical reporting to the public and policymakers. We found that fintech is most often covered with a positive tone and as a business story.
International and African media coverage of the continent is often accused of fuelling negative stereotypes, a trend characterised as “Afro-pessimism”. But in the past decade, much of the media conversation has focused on business buzz and followed an “Afro-optimism” or “Africa rising” script.
The fintech ecology is shaped by dynamics from the late 2000s. These include the rapid uptake in broadband use and the aftermath of the 2008 financial crash. Proponents claim that fintech will reduce poverty and motivate development, uplifting those unserved by formal banking. One 2016 study credited fintech with delivering a remarkable 2% poverty reduction in Kenya.
Previous research into the roll-out of fintech in countries across the continent revealed community-level tactics. “Change agents” are deployed to recruit new customers for mobile money services. “Brand ambassadors” are hired to “sit in public transport and talk about” fintech products.
The dominant frame was one we labelled “announcement”: the proclamation of a new fintech product through the media, a celebration of innovation.
“Gender inclusivity” was the least common frame. This kind of reporting focuses on a commonly shared rationale for fintech: it particularly benefits women and gives them new opportunities for equality and participation.
Most stories about the hazards of fintech conclude that it is nonetheless a beneficial force and that any “hiccups” are minor.
Overall, we concluded that the journalism in the African press we examined was largely sanitised. The tone, content and sourcing of reporting, even in the context of well-founded fears about fintech, point to an uncritical promotion of fintech.
LeGrand os a postgraduate researcher at University of Leeds; Paterson is a professor of global communication at University of Leeds, and Wiegratz is a lecturer in political economy of global development.
This article is republished from The Conversation
Fintech is most often covered with a positive tone and as a business story