The Chief Executive Officer of Skaleet, Hervé Manceron, has stated that the latest expansion of financial institutions such as fintechs, telecos, and neobanks has put a lot of pressure on Africa’s traditional banking system, forcing traditional lenders to create new methods like digital lending to keep up with the competition.
According to the CEO of Skaleet, a Paris-based provider of fundamental banking services to financial institutions in Africa, Europe, and Latin America, Digital lending is the next priority for banks as they try to recapture market dominance.
“Today, digital lending is a nightmare in Africa because of the cost and associated risks. One thing African banks struggle with is interoperability and the next is the capacity to develop digital lending.”
Hervé Manceron
Fintech companies in Africa have emerged from modest beginnings to become some of the continent’s biggest and fastest growing businesses in the last decade.
Fintech companies that provide crucial payment and digital banking services are among Africa’s unicorns (companies valued at more than $1 billion).
Fintechs have been able to recruit clients quickly in the lending industry by providing slick user experiences and unsecured algorithm-backed credit facilities that do not need collateral or face-to-face talks. Traditional lenders, whose services are significantly more clunky and harder to acquire, have lost businesses as a result.
“It is difficult for banks because banks have not changed much in the last 100 years. The one change was the move to card payment but fundamentally nothing in the core business has had to change.”
Hervé Manceron
Despite the challenges banks have in attracting consumers, Manceron believes banks will ultimately develop models that are more lucrative than fintech operators.
The CEO opined that most fintechs are “burning through cash” because their quick expansion is based on unproven business models that necessitate a lot of debt. Banks, on the other hand, are risk-averse and will put a premium on not losing money.
Digital Lending
According to Manceron, if banks implement Skaleet’s digital lending services, they should be able to compete effectively with fintechs that have lately disrupted the African personal loan market
Per the CEO, Trust Merchant Bank, one of the Democratic Republic of Congo (DRC)’s leading banks, has recently established an internet loan business in the country.
Skaleet will continue to urge banks across Africa to compete as digital lenders in the coming years.
The CEO further mentioned that Skaleet’s priority is to make technological tools available for banks to compete and be able to move into the digital lending space.
Mr. Manceron further stated that Skaleet’s top objective is to provide technological tools to banks so that they can compete and tap into the digital lending space.
“Our main business today is to provide tech to banks to compete with fintechs. The idea is to say that the banks have the capacity to compete, they just need to do it: they just need to act.”
Hervé Manceron
Hervé intimated that pursuing the goal of providing banks with the digital tools they need to fulfill the demands of the modern world has been his long-life goal.
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