Burundi is in the early stages of adopting financial technology (FinTech) to improve financial access, particularly in its remote and rural regions. Below we explore Burundi’s emerging FinTech ecosystem, highlight key players, and examine government policies supporting FinTech growth, with a focus on their impact on underserved communities.
Background and Economic Context
Burundi ranks among the world’s poorest nations, with a gross national income per capita of approximately $270 and over 70% of its population living below the poverty line. Access to electricity is limited, reaching less than 12% of its roughly 12 million people, and the banking sector is underdeveloped, with only 7% of adults holding bank accounts. Mobile penetration, however, is more promising, with nearly 7 million mobile connections, equating to 59% of the population. Yet, mobile money penetration lags at just 1%, with phone ownership split between 31% basic/feature phones and over 25% smartphones.
Current State of FinTech in Burundi
Burundi’s FinTech sector is nascent, with around 11 startups identified, focusing primarily on mobile money, digital payments, and remittances. Key players include:
- AfriPay: A digital bank offering accounts, transfers, and payments for individuals and businesses, accessible via mobile apps.
- IBB Mobile Plus: Launched in 2021 by Interbank Burundi, it provides digital banking services using a modern platform.
- Finbank s.a: Known for innovative mobile banking (Pesaflash) and agency banking, it has partnered with a FinTech firm to introduce mobile money-based micro-lending.
- BujaPay: Provides an API-linked payment gateway for online transactions, accepting multiple payment methods.
- Muhecash: Facilitates cross-border money transfers through digital wallets.
The sector also intersects with humanitarian efforts, with organizations using mobile money for cash and voucher assistance to support vulnerable populations. Financial inclusion remains low, but these initiatives signal potential for growth, especially in rural areas where traditional banking is scarce.
Government Policies and Regulatory Framework
Burundi’s government has taken steps to create an enabling environment for economic growth, indirectly supporting FinTech development:
- Investment Code (Revised 2021): Updated to attract quality investments by raising the minimum threshold to $500,000, it offers equal benefits to local and foreign investors, aiming to boost job creation and industrial growth, which contributes about 17% to GDP.
- National Industrialization Policy: Designed to enhance economic development, this policy fosters a business climate conducive to innovation, including FinTech.
- Central Bank Oversight: The Banque de la République du Burundi regulates the financial sector, promoting financial inclusion through its commitments to global initiatives like the Maya Declaration since 2011, though specific FinTech regulations are not widely detailed.
- Vision Burundi 2025: An ambitious plan for peace and prosperity, it envisions a role for FinTech in transforming the economy, particularly through humanitarian aid and remittances.
While direct FinTech-focused policies are limited, these broader efforts create opportunities for digital financial services to expand.
Specific Initiatives and Impact on Remote Communities
Burundi’s FinTech initiatives, though early-stage, are poised to benefit remote communities:
- Mobile Money and Payments: Services like Finbank’s mobile banking extend financial access to rural areas, reducing reliance on distant bank branches.
- Remittances: With around 350,000 Burundians abroad, digital platforms like Muhecash can deliver funds efficiently to remote households.
- Humanitarian Aid: Mobile money-based cash assistance programs improve aid distribution in rural regions, enhancing economic resilience.
The impact is modest but growing, with potential to increase financial inclusion and support livelihoods in areas lacking infrastructure. A surprising detail is the stark contrast between 59% mobile connectivity and just 1% mobile money penetration, highlighting untapped potential for rural outreach.
Challenges and Opportunities
Challenges include low digital literacy, limited electricity and internet access, and a fragile banking sector. Past political instability has also hindered progress, though recent increases in international aid signal improvement. Opportunities lie in:
- Remittance Market: A diaspora-driven economy offers a pathway for FinTech growth.
- Humanitarian Partnerships: Collaborations with aid organizations can scale mobile money solutions.
- Government Support: Investment-friendly policies could attract FinTech innovation.
Burundi’s FinTech landscape is embryonic but holds promise for bridging financial gaps, particularly in remote communities. Government policies, while not FinTech-specific, foster an environment where digital solutions can thrive, supported by players like AfriPay and Finbank. With mobile money penetration at a mere 1%, the sector’s growth potential is immense, especially as infrastructure and literacy improve, positioning FinTech as a key driver of economic inclusion in Burundi’s rural heartlands by 2025 and beyond.