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Sierra Leone News: InvestED/Salone Microfinance Trust wins Le760m Fintech Challenge

The Bank of Sierra Leone (BSL) has announced the second round of Fintech challenge winners, yesterday Tuesday 15 May 2018, with InvestED/Salone Microfinance Trust (SMT) winning the coveted price of Le760 million.
It started in 2017, hence the name Sierra Leone Fintech Challenge, 2017. The first round of three winners was announced in November last year, with each winner receiving Le100 million as seed capital.
That amount was meant to help test designs, buy in expert support and clarify the business case. The BSL received 20 applications during the first rounds and the three finalists were DataPool, Cash $ R/ACE and InvestED/SMT.
The ceremony, which took place at the Bank Compex, Kingtom, also saw the announcement of the winners of the first Cohort of Sandbox participants. The four winners are iCommit, Noory, MyPay and InvestED.
Six participants applied for Sandbox and three were approved as InvestED gains automatic qualification having won the Fintech Challenge.
In his keynote address the Bank Governor, Patrick S. Conteh, said that with the development in the fintech space, there has been an increasing focus on regulatory technology – Regtech. “Fintech and Regtech are, in my view, complementary.”
These techs, he said, are often adopted in conjunction and are rapidly developing in tandem. “As fintech firms automate the delivery of financial services, they need client on boarding, authentication and fraud control technologies that are more automated, yet equally or more secured,” he said.
More advanced cyber security technologies, the Governor said, are needed as more investors share their personal data with fintech platforms, creating cyber and data privacy risks.
Talking about the high hopes from fintechs, Governor Conteh stated that the potential of fintech is well described in one of the earliest reports on fintech commissioned by the UK Treasury.
This report, he said, is useful as it outlines how countries can positively position themselves in relation to fintech. A key finding of this report is that a country could establish a well-functioning fintech ecosystem and competitively position itself provided that a holistic view is taken that focuses on the following four core ecosystem attributes: policy, talent, capital and demand.
The BSL Regulatory Sandbox framework is an incubating regulating environment for nurturing innovative fintech products from both incumbents and startups. The Sandbox is intended to enable innovative fintech products, services, and solutions to be deployed and tested in a live environment prior to full licensing, within specified parameters and timeframes.
Managing Director of SMT, Archibald Shodeke, said that as a micro finance service provider they partnered with InvestED company. And, they took their innovation to them in terms of raising the digital financial landscape in Sierra Leone which is one that they think has not been entered before.
Shodeke, said that there are two major challenges affecting the financial inclusion landscape and growth of Micro, Small & Medium Enterprises (MSMEs), which he says are access to financial services and financial education.
As a company they realized that in order to tackle this challenge, they have to address it from two fronts, one on how do people have proper uptake of financial services and secondly on how do they on a wider and broader range have proper business management skills.
He said, this led to their partnership with InvestED to address that challenge, by being able to provide an App as a platform, by which people using mobile phones could be able to get understanding of basic management principles and at the same time basic financial teaching principles.
“In terms of access to finance we also realized as a micro finance institution for long have struggled to reach unreachable areas and the cost of doing that is enormous. As you have to set up branch offices, staff, monitoring, so going into remote areas is a challenge” he said.
He said that as a strategy, their business looked at a long term plan of going digital and they have made some efforts in terms of transforming the software they design in terms of changing some things they do.
InvestED is a US-based company that provides funding that supports the efforts of secondary schools throughout Washington State. They partner with 660 schools and assist 25,245 students with small amounts of short-term, item-specific, need-based funding – items such as shoes, coats, glasses, sports equipment, and academic fees.
Sandbox participant winner, iCommit, Avril Pratt, said that their organisations seeks to serve as a platform that will enable farmers to save some amount of money so that they can use it to buy agricultural inputs for them to be able to plant quality inputs that will lead to maximum production.
“During this pilot phase we have identified few areas and we are hopeful to roll it out nationally as the farmers understand the dynamics and how they could save more. We are so much intrigued that we are part of this, as it is a regulatory framework that will help us to bring out contribution to the development of the country as an innovation that will help famers and the agricultural sector as a whole,” said Pratt.
With support from USAID and funding by UKAid and UNCDF Mobile Money for the Poor, the Fintech Challenge is jointly organized by the Bank of Sierra Leone, FSD Africa. It is focused on four areas, policy, talent, capital and demand.
By Zainab Iyamide Joaque
Wednesday May 16, 2018.

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