Namibia is considering new regulation that will effectively open its economy up to new competition within the Fintech and financial services markets.

The Bank of Namibia is contemplating an “allow and see” approach, a “test and learn” framework and a “regulatory sandbox”.

With this regulation in place, Namibia wants to include more financial technology platforms into its national payments system.

Countries like South Africa often use the regulatory sandbox approach, while in Zimbabwe the central bank is at advanced stage of shortlisting Fintech companies picked under a regulatory sandbox.

Namibia looks to adopt a mix of approaches to ensure that no innovator is left out of its bid to expand Fintech. There are currently four commercial banks offering merchant accounts, six firms operating payment gateways and four payment processors – including Visa and China Union Pay.

Under its allow and see approach, the Bank of Namibia, “will engage the applicant and allow the innovation to go live without any restrictions or regulatory conditions but will continue to observe and monitor its progress before intervening” when necessary.

“Once fully satisfied with the conditions and / or operations of the FinTech, the Bank of Namibia may develop and / or amend relevant regulations,” it said in a newly published update to the National Payments System framework.

The Namibian monetary authority will also work in close cooperation with selected Fintechs to “craft a custom framework to allow the Fintech to be launched to the market with conditions” to minimise the impact of potential failure and to set criteria against which success can be measured.

The Bank of Namibia has also resolved to use a regulatory sandbox approach whereby a Fintech’s platform will be “tested, and experiments may be allowed in a live virtual environment designed by the applicant” with the Bank's approval.

Fintech attracted over US$2-billion of the US$4-billion venture financing that was invested into African tech start-ups in 2021.

Leaders of tech start-ups in Africa believe regulation has improved.

Most Fintechs are looking to solve challenges related to card payments, cross border payments, e-commerce and mobile money through blockchain and virtual card payments solutions.