Fintech touted as answer to Africa’s problems, but …

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 now 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? Is it mostly presented as a “good news” story? 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.

It also shows whether the press is serving as the public’s watchdog with regard to economic matters and corporate affairs.

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.

The fintech context

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, as the headlines above depict.

The fintech ecology is shaped by dynamics from the late 2000s.

These include the rapid uptake in broad- band use and the aftermath of the 2008 finan- cial crash.

Proponents claim that fintech will reduce poverty and motivate development (sometimes referred to as “leapfrogging” or “Silicon Savannah”), uplifting those unserved by for- mal banking. One 2016 study credited fintech with delivering a remarkable 2percent poverty reduction in Kenya.

Others call for a more cautious and sceptical approach. Critics dispute claims that fintech produces significant progressive change. They also argue that fintech can be exploitative and predatory, and that it fuels inequality by further enriching the already wealthy. - The Conversation