New Study: Leveraging digital to unlock the base of the pyramid market in Africa
Deloitte and Mastercard have released a joint report titled ‘Leveraging digital to unlock the base of the pyramid market in Africa’, with focus on the waves of digital innovation in financial services. The report, released during the World Economic Forum on Africa (WEF), reinforces that digital technology is financially empowering more Africans. With focus on lower-income earners, referred to as the base of the pyramid (BoP) market, the report looks at how best to facilitate financial inclusion by providing financial solutions, products and services that focus on affordability, reach, access and trust.
“Half of South Africa’s workface falls into the BoP income bracket, with this share likely to be much higher in the rest of the African continent,” says Roger Verster, Financial Services Industry Leader at Deloitte Africa. “Although BoP consumers represent the majority of African consumers and spending power, their low income has been seen as a hindrance to gaining access to products and services through traditional distribution models.”
The widespread reach of digital technology across sectors in Africa has spurred the introduction of new market entrants and solutions that aim to disrupt those traditional models and accelerate financial inclusion. A key enabler and catalyst for digital disruption in the financial services sector has been the rapid adoption of mobile phones, which play an important role in delivering digital services to those still unbanked or underbanked at more affordable prices.
Raghu Malhotra, President, Middle East and Africa at Mastercard, adds that developing a more inclusive Africa will take a combination of strong partnerships, relevant financial solutions and a willingness for governments to move beyond cash. He identifies several trends impacting financial inclusion, including mobile devices as a payments acceptance tool, the digitisation of key value chains, the growth in online cross-border money transfers and electronic identity solutions.
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