Accelerating Innovation in Africa through Regulatory Sandbox


Posted April 28, 2021 by panamax

Financial services in African subcontinent have been on an upward trajectory with customers demanding secured digital financial services and an efficient regulatory sandbox provides just that.

 
Let’s start by understanding what a regulatory sandbox is.

What is Regulatory Sandbox?
A Regulatory Sandbox is a framework by regulators that allows small scale, live testing of innovations by companies in a controlled environment so as to avoid the financial risks and liability.

Any new innovation or idea, if found viable in the sandbox and is further approved by the regulator, can be made available to public. Currently in Africa, out of 54 countries, only 3 (Kenya, South Africa, and Sierra Leone) have regulatory sandboxes. Some more regulatory sandboxes are either launched or are in the design phase (Sierra Leone, Mauritius, Mozambique, Uganda and Nigeria). Three of these are a direct output of FSD Network support. This shows that there’s a lot of scope in the African region when it comes to adapting to alternative finance.

African Fintech Market and Regulatory Sandboxes
African region has been slower than the rest of the world when it comes to adopting financial technology, however now the scenes have changed with several countries launching regulatory fintech sandbox to support the development of mobile banking solutions. A recent survey by World Bank and CCAF in more than 110 jurisdictions, including 24 in Africa, underlines this sentiment. 79% of the regulators are expecting a positive impact on SME financing, 65% are expecting a positive impact on consumer finance, and 56% responded positively to a more general question on the impact on financial inclusion.
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Issued By Panamax Inc
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Categories Technology , Telecom , Web Development
Last Updated April 28, 2021