Fintech is the marriage of finance and technology, now fintech referred to technology that improved the back-end systems of traditional financial institutions.
Fintech can now be defined as a business that leverages new technology to create new and better financial services both for consumers and businesses, it includes companies of all types operating in personal financial management, insurance, digital payment, remittances, asset management, liability management, retirement management and a broad cross-section of products and services stemming from all these. Fintech includes blockchain, Al, Big Data, Payments, Robo advising, Insurtech, and others.

Fintechs allows you to;

·       Transfer money abroad at low fees;
·       Provide low-cost ways to invest household savings;

·       Faster payment methods;

·       Medium to crowdfund projects or startups.

You’re probably wondering why all the hype and buzz around fintech, well the hype doesn’t stem from the technology itself but from who uses this technology.

The 2018 CEMAC REGULATION introduced new actors in finance, in other words, the 2018 CEMAC Regulation enables entities other than credit or microfinance to issue electronic money, namely;

•          Authorised or approved payment institutions;

•          Distributors and sub-distributors of payment services.

Approved or authorized payment institutions

According to the 2018 CEMAC Regulation, ‘payment institutions’ are institutions that, as a normal profession, provide exclusively payment and related services.

Note that as a payment institution, the money collected from customers remains the property of the customers and all authorized services are limited to within the CEMAC zone.

Before the 2018 CEMAC Regulation, Mobile Money transactions were mostly powered by telecommunication companies, based on technical partnership agreements with a licensed bank authorized to issue e-money. With the 2018 CEMAC Regulation, the execution of payment services is subject to an authorization issued by the National Monetary Authority of the CEMAC Member State where the company (applicant) was incorporated on the approval of the Banking Commission of Central Africa (COBAC).

Distributors and sub-distributors of payment services

Payment service providers are entitled to use, within the limits of their authorization, under their responsibility and control, the services of one or more legal or natural persons, called distributors or sub-distributors, for the purpose of marketing contracts and the provision of certain payment services. The distributor or sub-distributor shall act in the name and on behalf of the payment service provider. A distributor or sub-distributor shall be any natural or legal person offering payment services to its customers, in the name and on behalf of one or more authorized payment service providers.

With the 2018 CEMAC Regulation, two categories of agents have been instituted, a distributor and a sub-distributor. While the intervention of the distributor is larger in scope and scale, the sub-distributor can only perform some of the payment services as provided by law.

Services considered payment services

The 2018 CEMAC Regulation defines ‘payment services’ as the issuing, provision, or management of payment instruments or means of payment or the execution of payment orders. In this regard, payment services within the meaning of the new Regulation include the following activities relating to the provision or management of instruments that enable anyone to transfer funds, regardless of the medium or technical process used:

  • The issuing and management of e-money;
  • The provision of payment instruments or the acquisition of payment orders;
  • Money transmission services, not involving an account of either the payer or the payee or both;
  • Services that permit payment and withdrawal of cash into a bank or payment account and the related management operations;
  • The execution of the following payment transactions associated with a bank or payment account viz; direct debits, including individually authorized debits;
  • Payment transactions carried out with a payment card or similar device enabling such transactions to be carried out;
  • The execution of the following payment transactions associated with credit direct debits, including unitary authorized debits;
  • Payment transactions carried out with a payment card or similar device enabling such transactions to be carried out; one-off or permanent transfers;

Growth of fintech

In 2020, 30.1 million mobile money accounts were active in the CEMAC Zone according to the bank of Central African State(BEAC).In one of its reports titled “Electronic money payment services 2020, the BEAC reveals that the figure represents a 21% year-to-year increase in the number of active mobile money accounts.

Considering the economic power of the CEMAC, Cameroon accounts for 64.8%(195 million)of the overall accounts active during the period. Cameroon accounts for almost three times the number of mobile money accounts held by Congolese and almost ten times of accounts held by Gabonese. The report on electronic money payment services in CEMAC for the year 2020 by BEAC reveals that mobile money activity, financial transactions, and holding of e-wallets are doing well in the CEMAC zone.

In terms of value, Cameroon is still leading with 73.13% which makes 10.883 billion CFA.

The number of fintech companies founded annually has grown significantly in the last two years, rising from over 12200 in 2019 to 25000 in 2021.

The total investment in fintech companies keeps increasing year after year from around 110 billion dollars in 2018 to 362 billion dollars in the quarter half of 2021. The number of investment deals through M& A, PE, and VC involving fintech keeps doubling and this has really become attractive for investment.

According to eCHO between January and February  2021, fintech investment deals are leading in Africa and the number of investment deals keeps doubling in 2022.

As seen above fintech is not limited to financial services we shall be looking at innovations and opportunities in fintech in our next articles.


Barrister Fru Shella

Managing partner of CHI and Partners