How FinTech Helps Power the Gig Economy in Africa
Author: Kelechi Udoagwu
Meet Adaora, a 23-year-old Nigerian illustrator and content creator who spends no less than twelve hours every day scrolling, working, learning and interacting with other freelance creators on her iPad and smartphone devices.
She, like other young adults in today’s world, spends hours every day on social media platforms, online communities, shops, and instant messaging apps.
Adaora loves watching design tutorials on YouTube, engaging with her followers and peers on Twitter, and showcasing her work on Instagram, even though she has a personal website as well.
For Adaora, the social and online world is more than entertainment, it’s how she learns, develops her skills, makes a living, and grows her brand as a visual storyteller using hilarious graphic designs and illustrations to attract clients from all over the world.
People like Adaora are fast becoming the norm and not the exception. The global gig economy is kicking off steam, even in emerging markets. It has become somewhat of a saving grace for unemployed and underemployed adults affected by rising unemployment rates in their countries.
Gig workers – including freelancers, remote workers, and independent contractors – love convenience and cherish speed, as this directly influences the amount of money they can make in a month.
Freelancers within developing nations are at times limited by slow Internet connectivity and irked by sluggish and/or limited products and services. Like all other freelancers, those in developing nations want payments for services rendered quickly, efficiently and conveniently.
Thanks to new technologies, especially in the financial technology (fintech) space, this new crop of professionals have one important problem solved by innovators in their own backyard.
Finances – which is the foundation of any business, whether a solitary one or a company of 500 staff members have been made easier to manage with the upsurge in innovations in the fintech space.
Now back to Adaora, she has bills to pay and money to make. She has to renew her monthly Internet subscription on her devices and renew the monthly subscriptions for some of her most-used apps, both work and personal. She has to receive payments from her clients in different countries, make payments to collaborators, and send some money home.
In the past, Adaora would have had to walk into a bank to make all these happen because even though global fintech companies like Paypal have existed for a long time, they do not cater to certain countries in the emerging markets due to reasons like low revenue, poor markets, weak anti-money laundering controls, low or slow internet adoption, and negative stereotypes.
Now, indigenous web and mobile applications catering to specific regions in emerging markets have sprung up to serve their population who have been long overlooked by global fintech services.
Services like Paystack from Nigeria – an online payments company powering digital transfers in Nigeria, and recently across Africa, and Paylock from Ghana – a secure escrow platform that enables freelancers and clients earn each other’s trust by holding the payment for a job until it is completed, and both contractor and client are satisfied. Kenya’s Mpesa was one of the first mobile money service providers in Africa and has now evolved into a bank – fully serving its market by making payments and transfers very easy.
It is so valuable to people like Adaora that the banking systems and fintechs in emerging markets continue to evolve to keep up with innovations in developed countries to ensure a level playing field for all freelancers, regardless of where they are from.
As always we love to hear your thoughts in the comments, please share any innovative fintechs you have heard about within Africa.