Dubai-based financier Barika and Kraft is partnering with Kenya's top fintech innovators through a multi-tranche facility.

Located in East Africa, Kenya has over 56 million people and has become a regional powerhouse not only for East Africa, but for the entire African continent and the Middle East region. and Africa (MEA) as a whole.

In particular, the capital and largest city, Nairobi, is even nicknamed "Silicon Savannah" due to its strong tech ecosystem that acts as a regional hub. Multinational enterprises (MNEs) and those specifically active in the technology and fintech sectors have invested heavily in the country and have also boosted foreign direct investment (FDI) there.

The main goal of fintech companies is to offer unique services to make consumers' financial lives easier and more efficient. In countries that have seen significant economic progress, the relevance of fintech solutions is no greater than the projection of the East African region and their boom in their fintech sector.

Fintech development is driven by different types of technology, including:
Artificial intelligence, Blockchain, Cloud computing and data

Some of the more common types of fintech services include, but are not limited to:
Banking, payments, financial management, investments and loans

One of the fastest growing fintech categories is digital lending, which increased by 220% or nearly $15 billion between 2020 and 2021, according to CB Insights.
The fintech industry was valued at $110.57 billion in 2020 and is expected to reach $698.48 billion by 2030, according to Allied Market Research.

Kenya leads the way in consumer adoption of fintech: in 2019, 52% of Kenyan citizens were reported to have used fintech banking and payment services.
With Kenya already an East African financial services hub, the government and its regulators have positioned themselves to cater to the continued growth of the fintech sector, and their actions have significantly boosted growth in the wider regions. Kenya's motivation for fintech growth is evident in its forward-thinking financial inclusion strategies and incentive programs such as regulatory sandboxes.

China has used remote payments and digitalization of money management to build a stable instrument for financial inclusion. But he may not remain the leader for long. Recently, African countries like Nigeria and Kenya have become FinTech hotbeds, using accessible, low-cost technologies to engage consumers in unprecedented ways.

The definitive example is Kenya. The country has seen skyrocketing mobile penetration, with subscriptions exceeding the total population by 12%, and FinTech innovations have followed suit. For example, telecom giant Safaricom, which accounts for 5 percent of the province's GDP, led the way in 2007 with its M-Pesa money transfer service, which works much like a limited mobile bank, but without the need for an internet connection. M-Pesa combines Safaricom's mobile infrastructure with an agent model; Safaricom stores its balances, and customers can go to one of 110,000 agents nationwide to transact in person.

Equitel, a mobile virtual network operator competing with Safaricom's M-Pesa, is pushing the boundaries of financial inclusion even further by offering a full range of mobile banking services. Conceived equally out of ingenuity and necessity, Equitel is a new kind of hybrid company: a telecommunications company born out of a bank. These companies have greatly expanded financial inclusion in the country. While financial inclusion in Kenya was only 26% in 2006, today 83% of the population has access to at least basic financial services. The GSMA estimates that mobile penetration in West Africa has doubled over the past decade, with mobile payments and banking leading the way in the 15 member states. At the end of 2018, the region saw an increase of 23 million mobile money accounts over the previous year. Women, the rural poor and displaced people in particular benefit from using FinTech as a gateway to empowerment. In addition to other fintech hubs in the region, namely Egypt, South Africa and Nigeria; Kenya now joins the circle of one of the biggest "four fintech hubs" in Africa. In terms of VC funding this year alone, Kenya raised more venture capital in the first three months of this year at $482 million than in the previous year's $412 million.

Nairobi recently launched its new Nairobi International Financial Center (NIFC), which will provide investors across the financial services sector with support and offers such as immigration and tax incentives, as well as office space in the new building.
The Nairobi International Financial Centre (NIFCA) shares the desire to maintain their respective financial services industries' attractiveness, openness, and competitiveness in a global market as common objectives.
Since then, the NIFCA has signed a lot of memorandums of understanding (MOUs) with the intention of working together and creating an atmosphere that will improve opportunities for the financial and related professional services industries. Collaboration has taken place in the FinTech sector, specifically to collaborate in three key areas:
a) determining strategies for expanding FinTech funding options in Kenya;
b) determining the actions that can be taken to support Kenyan FinTechs' expansion and growth
c) coming up with ideas for improving the policy and regulatory framework to help Kenyan FinTechs grow.

Remittances to Kenya have increased tenfold in recent years, reaching a record $3.718 billion in 2021. This surpassed the previous record, which was set in 2020 at $3.094 billion; according to the Central Bank of Kenya's (CBK) Diaspora Remittances Survey. Kenya has a significant impact on the overall global remittances industry because many Kenyans live abroad and many non-Kenyans also live in Kenya.

Barika and Kraft offers its creating part nations various sorts of funding modalities to help state run administrations in supporting monetary development and tackling improvement challenges. Barika and Kraft's collection of private sector loans and grants differ in purpose, focus, financing and disbursements, and implementation arrangements to meet the changing needs of countries and the African continent as a whole.

A country would need a larger and longer commitment than a typical BK debt financing loan to take on a complex project like a vast road network or comprehensive energy program.
A project of this nature is supported by BK's multi-tranche financing facility. It could be a single independent project with significant parts; multiple programs with related projects; or slivers of a contract with a long term.
When the investments are ready for financing and the borrower requests a tranche, BK provides a series of tranches in accordance with a Multi Tranche Facility. Since borrowing by a nation is timed to coincide with actual funding requirements, resources are utilized more effectively. Due to the fact that lessons learned from previous tranches can be applied to subsequent tranches, BK and the borrower have multiple entry points for policy dialogue.

BK is able to provide its customers with greater funding predictability and continuity thanks to the Multi Tranche Facility.

Worldwide praise for Kenya's success in mobile money is well-known. For instance, a report titled FinTech in Sub-Saharan African Countries by the International Monetary Fund (IMF) demonstrates that Sub-Saharan Africa has emerged as the global leader in mobile money transfer services, facilitating widespread access to financial services. "East Africa is leading in the adoption and use of mobile money," it states. Kenya is currently one of the most successful cases regarding the use of mobile money. It is built on an appropriate pricing strategy to attract customers, appropriate regulation, and a network that is dependable and trustworthy.

Kenya has a rare chance to not only maintain its position as a regional hub but also to export its expertise to other countries, such as through mobile money.

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This release was published on openPR.