Morocco lagging behind in African FinTech startups

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While Africa’s FinTech startup industry is booming, one country – Morocco – appears to be lagging behind, according to a report released Monday, December 27 by Morocco World News.

In recent years, a number of FinTech startups in Africa have generated annual revenues of over $ 100 million, such as the Kenyan mobile money service Wave, Nigerian payments giant OPay and Flutterwave, another Nigerian company that provides cross-border payment services.

Read more: Nigerian payments giant OPay in talks to raise $ 400 million at a valuation of $ 1.5 billion

Earlier this year, PYMNTS reported that OPay set out to raise $ 400 million this year after expanding into Egypt.

The company processed $ 2 billion in payments in the first 11 months of 2020 and appeared to be establishing itself as a “super app,” an initiative that began with the launch of its ORide bike rental service.

Meanwhile, Flutterwave achieved unicorn status this year. In October, she was also seeking investors for a new round of funding that would take the company to a minimum valuation of $ 3 billion.

Read more: Nigerian payments startup Flutterwave seeks $ 3 billion in new funding

However, when the business media platform Afridigest published its listing promising African startups that have made more than $ 100 million in revenue, none of the Moroccan companies have made the cut.

There are several reasons for this, Morocco World News noted, citing comments from a recent webinar involving prominent figures from the country’s financial industry.

One of the attendees, Jean-Michel Huet of Bearing Point, said Moroccans have not started to fully trust online payments and services requiring cards, often choosing to pay in cash from a ATM machine using a credit card.

Read more: Lack of trust and government support are the main obstacles to digital advancement in developing markets

They also tend to trust established institutions like banks, making it harder for FinTech startups to make inroads. Another obstacle, according to the report, is “the poor relationship Moroccan entrepreneurs have with the ‘culture of failure’.”

Abdeslam Alaoui Smaili, CEO of Highech Payment Systems, said innovation is not just about discovering an idea, but also bringing it to market. He and the other webinar speakers emphasized the need for startups to connect with established businesses and seek guidance.

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