Financial Inclusion vs Financial Exclusion: A Mauritian Perspective

Introduction

According to the World Bank, approximately 60% of adults in sub-Saharan Africa are unbanked, hindered by a lack of money, distance to financial institutions, and insufficient documentation. However, with the advent of FinTech, Africans now have increased access to banking and financial services, albeit not in traditional “brick-and-mortar” ways.

What is Financial Inclusion?

Financial inclusion refers to individuals and businesses having access to useful and affordable financial services that meet their needs. The adoption of financial technologies like mobile money has opened up new possibilities for Africans to make or receive digital payments and save money.

FinTech in Sub-Saharan Africa

FinTech has become a crucial enabler of financial inclusion in sub-Saharan Africa, with the Boston Consulting Group projecting the African FinTech market to reach USD 65 billion by 2030, representing a 13-fold increase over the 2022 market. Mauritius has positioned itself as the gateway for FinTech service providers looking to tap into the burgeoning African market.

Regulatory Framework in Mauritius

The Bank of Mauritius and Financial Services Commission oversee the development, regulation, and supervision of the FinTech services industry in Mauritius. The Financial Services Commission regulates crowdfunding platforms, peer-to-peer lending operators, and virtual asset service providers.

Regulated FinTech Products

Peer-to-Peer Lending

Peer-to-Peer Lending enables individuals or businesses to obtain loans directly from other individuals without going through a financial institution. The Financial Services (Peer-to-Peer) Lending Rules provides a comprehensive framework for regulating peer-to-peer lending operators.

Crowdfunding

Crowdfunding is the use of online platforms to raise money for business ventures from a large base of investors. The Financial Services (Crowdfunding) Rules provides a specific regulatory framework for ensuring that crowdfunding operators, investors, and entities seeking funding are adequately protected.

Virtual Assets

Virtual Assets, such as cryptocurrencies, have also gained popularity in Mauritius. The Virtual Assets and Initial Token Offering Services Act brings clarity to the regulation of virtual assets by excluding digital representations of securities from its purview.

Future of FinTech in Mauritius

FinTech is poised for bright horizons in Mauritius, helping to lift millions of Africans out of poverty. With increasing competition from jurisdictions such as Rwanda and Kenya, Mauritius must work together to keep pushing standards higher in the FinTech industry to become the jurisdiction of choice for FinTech operators.

Conclusion

This article provides a general guide to the subject matter. Specialist advice should be sought about specific circumstances.

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