While Africa is frequently overlooked in regard to tech development, Fintech is one sector that has boomed in the continent. A recent report distributed by Mastercard highlights the growth of innovation in financial services in the region, calling it a “funding powerhouse.”
The report notes that in the Sub-Saharan Africa (SSA) region, “Fintech startups recorded 894% year-on-year growth in funding in 2021.” SSA raised $1.56 billion in funding during that period and 564 Fintech startups launched during the year.
Leading the way is the payments sector, including digital money facilitated by mobile phones – especially since around 40% of adults have a bank account, so the opportunity is there to drive financial inclusion by leveraging technology.
The report states:
- Africa’s domestic e-payments market is projected to see 20% revenue growth per year (compared to 7% globally), reaching around USD 40 billion by 2025.
- Over 90% of jurisdictions in Africa have established regulatory frameworks for digital payments.
- Regulators across countries have adopted a collaborative approach to enable the introduction of new solutions by fintech companies.
Ola Atose, founder & CEO of KoinKoin, shared a comment on the Fintech report:
“For many years, African countries have largely been neglected of the same access to the tier one financial services typically offered to richer nations in the Northern hemisphere. This lack of access has stipulated a digital revolution across Africa, whereby cutting-edge and African-born Fintechs, that solve every-day real-life problems, have emerged. Such problems include cross-border transactions, currency exchanges, and access to assets that store value. In fact, demand for cryptocurrency in particular has surged across the continent, with funding for Africa-focussed cryptocurrency firms growing by 11 times in just 12 months, from Q1 2021 to Q1 2022.
Atose believes that for the Fintech revolution to succeed there needs to be even more collaboration between local and national governments, traditional financial services, and Fintechs.