BY ONOME AMUGE & CHISOM NWATU
Experts in the African financial technology ecosystem have called for the establishment of a sustainable Decentralised Finance model in banking and finance across the gradually-competitive African continent.
They made the call at the 2022 Digital PayExpo company conference and exhibition held at the Eko Hotel and Suites in Lagos recently.
The call follows the market growth and transparent payment settlement offered by Decentralised Finance.
Decentralised Finance, also known as DeFi, refers to the innovative processes and technologies in accessing finance and conducting financial transactions without the involvement of third parties unlike traditional financial services, thereby making the banking process easily accessible and affordable to financial consumers.
According to industry players, this method of transaction, as a global finance force compared to the cumbersome traditional banking processes, has in the past few years served as a potentially significant growth engine and
disruptive force for digital payments in developed economies and has also witnessed significant growth in terms of scale and adoption across developing countries.
Emergen Research, a research and consulting firm, in its assessment of the global Decentralised Finance platforms market, reported that the DeFi market size which stood at $13.01 billion in 2020 is expected to reach $507.92 billion in 2028 at a steady compound annual growth rate (CAGR) of 43.8 percent.
The experts at the 2022 Digital PayExpo company conference and exhibition in Lagos addressed various verticals of DeFi and impact on the African continent. The event, themed “Defi Africa: Beyond Hype, Understanding Use Cases for the Continent”, examined the potential implications, complexities, and risks associated with the proliferation of consumers using Defi Africa applications.
Speaking at the event, Abubakar Suleiman, managing director, Sterling Bank Nigeria, said Africa is still a continent with a limited amount of financial interactions compared to other continents of the world.
Suleiman encouraged countries across the continent to work collectively on building the medium of trust in interactions which will consecutively increase trade and lead to growth of the continent in terms of multiple markets.
Decentralised Finance, he said, is capable of strengthening Africa’s contribution to global trade as well as establishing financial trust in the continent.
The Sterling Bank managing director also noted that the innovation offers a big advantage to the financial industry by bringing the benefit of trust, transparency and easy access to every person in need of banking which are the key factors of financial services that have been lacking in the continent over the decades.
Kafilat Araoye, managing director and CEO, Lotus Bank, talked on the perspectives and future of digital services in Nigeria, as well as key enablers, risks and challenges.
Araoye remarked that digital services are fundamental to businesses in Nigeria and the future of the entire financial services industry as they encourage documentation. She added that Nigeria is currently at the
developmental stage of its financial services operations as the economy is still predominantly cash-based.
On how Nigeria can progress from its current stage towards a more defined decentralised economy, she said there is need for the government and financial institutions to give more focus to financial services and literacy by educating the masses on the importance of financial inclusion and digital services, and also create a future where the global trend around crypto and digital services will be the order of the day.
Branka Mracajac, CEO, 9 Payment Service Bank (9PSB), a fully digital payment service bank, said that Decentralised Finance accelerates the adoption of digital payments and facilities.
According to Mracajac, the foundation of economic growth and prosperity of citizens of any nation is dependent on building a society where there is access to financial services and products.
She added that financial inclusion must be increasingly prioritised to ensure that the Nigerian economy experiences robust growth.