It’s one thing to deal with the challenges of building a business in a developing market, but it’s a double whammy to also have to worry about basic banking infrastructure.
This is exactly the situation facing many startups in Africa and other emerging markets, with their accounts soon to be closed at Mercury Bank, one of the more popular US-based banking options in the African tech ecosystem that provides easy access to funds in US dollars.
Oversight of Africa by Western financial institutions is an ever-evolving issue. Countries such as Nigeria, South Africa and Kenya are brimming with talent and potential and are major tech hubs on the continent, yet unfortunately, these countries have been labelled as high-risk – in most cases, unfairly.
The removal of such a vital financial service would be a setback of enormous proportions that could stifle capital and growth. While there are other banking options in the US, the reality is the same and this appears to be a systemic problem targeting African economies.
Still, this is a wake-up call for developing home-grown infrastructure to support the financial needs of Africa’s tech ecosystem.
Until next time,
– Emmanuel
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