What you need to know:
- The proliferation of Fintech services has generated electronic waste, including discarded mobile phones and outdated hardware, which poses environmental hazards
In an effort to offer edge cutting financial services to the unbanked, financial technology (Fintechs) companies are grappling to align their operations with environmental, social, and governance (ESG) goals.
This comes at a time when Africa, according to the African Development Bank, has become the most vulnerable continent to climate change.
“The proliferation of Fintech services generates electronic waste, including discarded mobile phones and outdated hardware, which poses environmental hazards,” the Financial Technologies Services Provider’s Association (FITSPA Uganda), notes in the Fintech Fund Feasibility Study.
FITSPA also notes that the energy-intensive nature of Fintechs , such as mobile phones, data centres, and bases for internet stations, consumes significant energy resources and puts strain on the energy infrastructure, which contribute to increased carbon emissions, exacerbating climate change concerns.
The study further notes that credit guarantee programmes need to encourage Fintechs to adopt e-waste disposal and recycling policies, which are crucial to reducing environmental damage and fostering a circular economy.
There are at least 24 financial technology companies operating in Uganda, according to data from Bank of Uganda.
Fintechs have made significant progress in gaining access to large segments of the population, especially those living in remote or marginalised areas, where access is still hampered by a lack of infrastructure and technological literacy.
They gather, process, and store enormous amounts of sensitive customer personal and financial data, which raises questions about the potential misuse of sensitive information and data breaches that can cause people to suffer and undermine confidence in the Fintech industry.