Newsletter September 2017 - Unleashing the potential of Mauritius as a fintech hub
Dear Valued Investors,
As the economy is maturing, we find ourselves at a crossroads. New pillars must be developed to achieve sustainable growth which will impact our life meaningfully. This can be achieved by carefully monitoring global trends, by reviewing our specificities and tapping more capacity to enhance our preparedness to seize arising opportunities.
Fintech presents prospects that have the potential to unlock a wide range of activities. The sector is growing exponentially at a rate of 82 % per annum globally, with capital inflows exceeding USD 12 billion transiting through the Fintech investment markets, providing viable disruptive solutions to upgrade the means of doing business.
This is reflected in research undertaken by Goldman Sachs which recently estimated that USD 4.7 trillion in financial services revenue run the risk of being displaced by Fintech. Furthermore, over 50% of the world trade in services is already digitalized from e-commerce to B2B activities, thus allowing small companies and start-ups, previously excluded from main stream business, to participate directly in globalization.
On this wide sea of opportunities, Mauritius must hoist new sails to make the most of the prevailing winds.
As an internationally reputed financial centre of excellence in a well-regulated jurisdiction with tax treaties and investment promotion and protection agreements with several countries and an advanced ICT capacity with highly developed and performing infrastructure, Mauritius can aspire to become the regional platform for the Fintech Industry.
However, Mauritius must create a dynamic Fintech industry poised on a multipronged strategy which should encompass capacity building, openness, strong linkages among markets and start-ups, as well as the provision of adequate nurturing and mentoring at the initial stages to allow new entrants to develop their full potential and flourish.
The government has proposed several incentives, including the National SME Incubator Scheme, the Regulatory Sandbox License and the Innovator Occupation Permit, amongst others. There is, however, an urgent need to ensure that these separate initiatives are bundled into one strong package of instruments to boost the innovation-led ecosystem that is primordial for the emergence of a robust Fintech industry.
The 2017/18 Budget recognized this necessity. The setting-up of an association for the Fintech industry was announced. A Fintech Association with a regional dimension will in fact bind together all these initiatives and establish the required ecosystem for the development of a dynamic sector. In this context, last September, BOI organized a workshop that will lead to the establishment of this association.
This issue of our newsletter provides more information on the subject. You will also find an in-depth analysis of the latest World Economic Forum’s Global Competitiveness Report which once again puts Mauritius in the lead in Sub-Saharan Africa.
Engaging in disruptive activities like Fintech has the potential of moving Mauritius up a higher tier on a global level.
I wish you a pleasant read.
Read the complete newsletter here