SME banking, Bitcoin, stokvels & what else to expect for SA fintech in 2020

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When it comes to fintech, South Africa has one of the most mature landscapes on the planet and as such it’s a space that is eagerly watched for developments and disruption. It’s something that AlphaCode (a part of Rand Merchant Investments) keeps tabs on, especially as the incubator aims to identify the most promising startups in the fintech environment.

The firm is also acutely aware of the trends that are developing locally, and to that end has predicted what to expect in the South African fintech space in 2020.

Weighing in with her insight is head of AlphaCode, Dominique Collett, who notes that the local fintech environment is ripe for investment despite hesitancy internationally to back SA projects.

“Even though international investors are somewhat wary of putting money into South Africa currently, there are enough dynamic local players to fund projects – with deals certainly starting to flow through. This is a tremendously exciting sector to watch,” she enthuses.

Collett has identified seven different areas in particular to keep an eye on.

SME banking

The first thing to expect is the rise of banking solutions directed at the SME market. 2019 saw a larger focus on digital options with the likes of TymeBank and Discovery Bank, but the new year will see SMEs come into focus, according to Collett.

“Following its R3.56 billion takeover of Mercantile Bank earlier this year, Capitec Bank has shown that it views the SME and entrepreneurial sectors as providing significant growth opportunities. We expect them to do for SME banking in 2020 what they did for consumer banking over the last decade,” says the AlphaCode exec.

Shared financing 

The next prediction looks at shared financing, which builds off of the idea of stokvels, which have been a key element of South African life.

“In line with this concept, mutual services will see strong growth next year. Iemas Financial Services is a group-buying community that leverages the power of its hundreds of thousands of members for collective bargaining,” Collett highlights.

“Arguably, it functions as a co-op that negotiates good deals on behalf of its members. This can include anything from discounts at a retail store to more affordable insurance products,” she adds.


Yes crytocurrencies are here to stay and AlphaCode believes that Bitcoin will make a return to prominence in the coming year, with its deployment in an emerging market scenario being the best use case in the firm’s opinion.

It’s perhaps no wonder that Facebook is developing its own Libra crypto.

“With this in mind, 2020 will put the focus back on the decentralised money discussions that were rife when Bitcoin first appeared. Today, the major difference is that the spotlight is firmly on Africa,” notes Collett.

“Luno has continued to cement its position as a dominant emerging market crypto-currency platform with its relaunch in Malaysia and continued expansion into other African countries,” she continues.


We could not talk about fintech without addressing insurance, and AlphaCode says it is going to get a lot smarter in 2020. This as the likes of Discovery and OUTsurance are using data to reward good driving behaviour with better priced premiums.

In order to deliver more solutions in this vein, insurers could look to partner with more sensor and device manufacturers in order for users to track and earn points on their respective plans.

In future everything from geysers to fire detectors could be connected to a smart sensor system.

Financial inclusion

This is an important one is financial inclusion, with an increased focus on servicing the lower-income segment of society in 2020, as well as making fintech solutions more readily available to them.

“Companies like Selpal, Flash and Nomanini are making it easier for informal traders to sell their products. These innovators bring alternative distribution channels to informal communities that easily connect merchants to suppliers and customers,” Collett points out.

“These solutions are having a real impact on the lower-end of the market in a commercially sustainable way. Importantly, they are African solutions to solve Africa’s specific challenges,” she stresses.


For those wanting to keep tabs on must-watch areas, the proptech space is primed for disruption.

Here a number of companies are looking for ways to improve the experience for home owners, renters and sellers.

“Innovators are quickly waking up to the fact that the local real estate market is highly fragmented and is one that can be improved and empowered with technology. When house prices are low and in a buyers’ market, people cannot afford to pay high commissions to agents. This is where proptechs will start dominating,” says the AlphaCode head.

Alternative fintech partnerships

The last area that Collett and co. have looked at is how new partnerships will be fostered in the coming year, with fintech companies aiming to work with organisations they otherwise would not have considered.

“Retailers will also start coming back into the financial services space. Shoprite is looking at a number of financial services initiatives while Pick n Pay has partnered with TymeBank. Arguably, many retailers recognise that they cannot provide these kinds of services themselves and are identifying fintech specialists that they can work with,” Collett concludes.

[Image – Photo by André François McKenzie on Unsplash]

Robin-Leigh Chetty

Robin-Leigh Chetty

When he's not reviewing the latest smartphones, Robin-Leigh is writing about everything tech-related from IoT and smart cities, to 5G and cloud computing. He's also a keen photographer and dabbles in console games.