Senegalese Fintechs Face Compliance and Regulatory Challenges
As fintech start-ups continue to enter the Senegalese market, they are faced with navigating a complex regulatory environment that can hinder their growth. Despite being in its early stages of development, Senegal’s fintech ecosystem has immense potential to contribute significantly to the country’s digital finance landscape.
Challenges Fintechs Face
Identifying Relevant Authorities
Fintechs in Senegal face numerous challenges as they strive to comply with existing legal, financial, and tax regulations. One of the biggest hurdles is identifying the relevant authorities with whom they must validate their compliance. There are over a dozen regulatory bodies in Senegal, including:
- Bank of West African States (BCEAO)
- Directorate of Money and Credit (DMC)
- Regulatory Authority for Telecommunications and Posts (ARTP)
- And others
Regulations Not Aligned with Commercial Realities
Another challenge fintechs face is dealing with regulations that are not always aligned with their commercial realities. For example, crowdfunding platforms may struggle to operate in a market dominated by traditional banks and financial institutions. The regulatory framework around electronic signatures, set up by the Agency of Information of the State (ADIE), can also be complex and time-consuming for fintechs to understand.
Partnership Building and Financing Challenges
Fintechs also need to build partnerships with big billers and incumbent financial institutions and operators to expand their offerings. However, this can be difficult due to the weak bargaining power of fintechs in Senegal. Additionally, finding financing remains a challenge for fintechs, as traditional banks are often reluctant to finance emerging business models.
Lack of Ecosystem Fostering Development
The lack of an ecosystem fostering the development of fintechs is another major obstacle. There is currently no framework in Senegal to share projects with research centers, large companies, public actors, and investors, and develop partnerships.
Overcoming Challenges
Despite these challenges, there is a future for fintechs in Senegal. Innovation is one of the core drivers of digital finance, and people are hungry for innovative services tailored to their needs and aspirations. To overcome their challenges, fintechs need assistance from organizations like the MM4P program, which aims to act as a neutral broker in the market and bring together all relevant stakeholders in digital financial services.
Support from Organizations
The MM4P program has already taken steps to assist fintechs, including:
- Organizing a meeting with Fintechs on September 7, 2017, to discuss their current projects, challenges, and perspectives
- Formalizing a framework to assist them in the market
By addressing these challenges and receiving support from organizations like MM4P, Senegalese fintechs can overcome their obstacles and contribute significantly to the country’s digital finance landscape.