The International Trade Centre (ITC) is a multilateral agency which has a joint mandate with the World Trade Organization and the United Nations through the United Nations Conference on Trade and Development. Through its work, the ITC contributes directly to 10 of the Sustainable Development Goals.
ITC supports start-ups around the world especially in Africa to go to international markets. In the Tech sector, ITC has been doing it for 10 years mainly in Africa and south Asia, working with established IT companies and Tech start-ups having a particular focus on FinTech because they are extremely successful on the continent and because they support financial inclusion. Financial inclusion according to World Bank definition is where individuals and businesses have access to useful and affordable financial products and services that meet their needs that are delivered in a responsible and sustainable way.
Financial technology, often shortened to Fintech, is defined as the technology and innovation that aims to compete with traditional financial methods in the delivery of financial services. It is an emerging industry that uses technology to improve activities in finance. Banks are moving to the FinTech’s space and new players are coming in the sector, disrupting the market, taking the financial and innovation industry by storm and increasing it with lots of opportunities. 1.8 billion adults around the world do not have access to financial services, at the same time, among the 1.8 billion, 1 billion have mobile phones and half of them have smart phones giving them access to a whole range of innovative financial services digitally. With the cost of handsets going down, as a result, they have been increasing in the number of digital financial services on the continent. Every year, there is double digit growth in venture capital in Africa which mainly goes to three leaders countries, South Africa, Nigeria and Kenya followed by a long tail of others countries including Uganda where much smaller investment is going to.
For instance, in Uganda Safe Boda has been able to attract investment and has gone from series B and soon moving to series C but most other FinTech companies are still in series A and it is a challenge to get them to connect to investors willing to invest over $8 million plus.
Nigeria’s financial digital services and names like Flutewave, Paystack, Interswitch are some of the companies that are not only successful on the huge Nigeria domestic market but also elsewhere on the African continent. This is a good example on how to develop a product that services both the domestic market but also foreign markets. For these to work in Lagos and Kampala, a combination of factors to build a strong ecosystem to support FinTech sector is needed.
Infrastructure is needed before anything else, as without infrastructure nothing can be possible.
The progression in financial technology has been possible because the internet infrastructure was put in place. The government of Uganda plays an important role in facilitating the deployment of infrastructure and also in making sure that the policies and regularities that are affecting the financial sector and FinTech are both supporting the development of the private sector in the FinTech and at the same time, taking into account the interest of the public.
London has a good example of Regulatory Sandbox that allows businesses to test innovative propositions in the market, with real consumers and then scale them up once a concept has been proven and has now been replicated in Rwanda.
The government of Uganda should do the same thing in a controlled environment to give Fintech an opportunity to experiment new services.
There is evidence of a need for the domestic market to absorb new services. Finding a gap is a big challenge. The trends are really positive but a country like Uganda is not quite there yet. Human capital is extremely important which is not about strength in numbers but about strength in quality of education. It is about people getting digital skills, and maintaining a focus on quality rather than quantity. The best universities should focus on training quality skilled professionals rather than training a large number of people who have average or below average skills.
The digital transformation economy sector is not about FinTech, only, it is everything. Skilled people are needed for the digital transformation, and it is now difficult finding them coming out of universities.
ITC as an organisation is trying to contribute to Uganda ‘s IT development sector, as part of an eco-system of supportive players like the chamber of commerce, FITSPA, Tech hubs, Incubators, Accelerators.
The culture of entrepreneurship can be nurtured by awareness campaigning in role models. Some people brought by ITC from Uganda (Malcolm Kastiro, Founder of Yakako, Jean A. Onyait, Founder, Akellobanker and Allan Rwakatungu, Founder, Xente) are role models the young generations can be inspired by.
The work of The International Trade Centre (ITC) is to build resilient eco-system contributing to it and they do it by mapping the eco system using an in-house methodology and also by supporting smart public dialogue to improve regulations of the sector. Also, everything has to be gender centres (what is this word centres? Is the meaning about gender equality?) . The tech sector is set to be opened to women but the reality is very few women actually work in this sector.
ITC partners with multi players who are mainly the tech hubs in the tech sector, like the Innovation Village, and Outbox in Kampala. These are also start-ups organisations which struggle for sustainability. A new book is being launched with solutions, a publication that looks at the good practice in terms of services monetization.
Another work of the ITC is to build capacity of the managers of these organisations, the founders and staffs, working on company evaluations, accounting, business plan, value proposition. These are important for start-ups to tick all these boxes to make them investable, and ready to be introduced to investors and opportunities. ITC does this in Africa and Europe.
Martin expressed disappointment that the UK wants to leave the European market but at the same time there are historical ties with the Commonwealth and this will give opportunities to get closer to its Commonwealth members.
ITC was proud this year to participate at mobile congress, having the 1st African stand at an event attracting over 100,000 people every year, where Uganda and Senegal start-up showcased at the event.
Johnson K. Nyeko, Md, The Benconolly Group | Chairman, Mandulis Energy one of the speakers posed a question to Mr Labbe: In the past, the ITC sponsored non-traditional Ugandan agricultural products in the world market. Remember Dr Spencer Cook who headed the project – is that project still there now?
Martin Labbe answered that Uganda has gone a long way and now and ITC is no longer sponsoring agriculture products. It has now expanded in digital financial services products that are being sold outside Uganda and Africa.
Another question was asked if Mr Labbe had looked at ways of attracting Ugandans in Uganda who have the capacity to invest in these start-ups. Mr Labbe talked of $100,000 which currently in Uganda can’t buy a small piece of land and yet investors in the start-up could raise money in double digits returns.
Mr Labbe answered that there is a Kampala Angel Investment Network called KAIN (www.kain.co.ug) which can be reached for opportunities. Venture capital companies not only come with money but also with skills and this is why Venture Capital (VC) and Private equity (PE) are key to start-ups.
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