What is it about?

Self-help groups can be found in many areas of Africa, and their customary rotating credit arrangement is also popular among African diaspora communities. A significant rise has occurred in these groups at the wake of the neoliberal restructuring reforms of the 1980s-90s, with a decline in formal sector employment and state-funded producer cooperatives. At present, these mutual support groups are targeted by FinTech platforms as well as conventional banks with various financial products and software apps. My recent research explores of the contentious interplay between the formal and informal finance in these emerging digital interfaces in Africa. It studies the intersection of FinTech with the social economies of African mutual help groups in Kenya and South Africa.

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Why is it important?

Informal means of financial access continue to flourish in the economies of many African countries, due to long histories of neglect by the formal banking sector. At the same time, the article questions the assumption that FinTech in Africa advances inclusion in formal market spaces. It argues that instead, it could be seen as producing new hybridizations of informal and formal financial practices.

Perspectives

There is a danger that FinTech platforms with their universalizing group management templates can bring forth an increasing standardization of the ties of mutuality in savings groups. Digital group management systems could expose the informal groups to ill-regulated and expensive credit apps and commercialize their social purpose. However, the resilience and adaptability of the informal savings groups may also offer hope for positive solutions. While Africa’s FinTech enterprises face numerous challenges in the global marketplace dominated by the norms of Silicon Valley, more attention is needed to locally inspired solutions and technology start-ups.

Daivi Rodima-Taylor

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This page is a summary of: Platformizing Ubuntu? FinTech, Inclusion, and Mutual Help in Africa, Journal of Cultural Economy, April 2022, Taylor & Francis,
DOI: 10.1080/17530350.2022.2040569.
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