FinTech
FinTech in Africa: Why we see massive potential
70% Of the world’s $1 trillion mobile money market is held in Africa, and there’s much room to grow. With digital becoming a way of life in Africa, the stage is set for the next phase of FinTech growth. Of the ~650 million adults in Africa, nearly 60% do not have a traditional bank account. Further, 90 percent of Africans still rely cash instead of banking cards for transactions. This fact alone supports investors deploying capital in Africa’s FinTech sector.
Despite a slowing global tech economy, Africa’s FinTech market has experienced steady growth. Venture capital continues to invest in Africa’s Tech sector regardless of the instability in the markets. In fact, the number of investments in this space has doubled since 2021. Investors have been targeting firms in Egypt, Kenya, Nigeria, and South Africa. Inflows to other African locations additionally has grown by 382 percent year-on-year compared to 2021.
What’s Next?
African FinTech companies and other stakeholders, including governments and investors, have an opportunity to consider how the sector can achieve sustainability over the long term. The current moment has shown fruitful as Africa has produced unicorns in the FinTech space—surpassing billion-dollar valuations—and the profitability of many ventures is precarious. The stage is now set to unlock the sector’s potential.
As FinTech matures, financial services on the Continent are at an inflection point, and several African countries have a significant opportunity to capitalize on the momentum of recent years to unlock further potential.
Authors: Sunga Mkwezalamba, Immaculate Odwera
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