The Future of Fintech in Africa

Republic of South Africa

IFC has been a key investor in Africa&rsquo;s fintech space, having invested in many of the most prominent fintech startups the&nbsp;continent has produced thus far.

In addition to its work with startups,&nbsp;IFC is also supporting the development&nbsp;of the fintech ecosystem in Africa&nbsp;through its partnerships with financial&nbsp;institutions and regulators.

IFC is&nbsp;working with banks and other financial&nbsp;institutions to develop digital banking&nbsp;solutions that can reach underserved&nbsp;populations in Africa.

Some Key Fintech Entrants in Africa Invested in by IFC

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The US dollar has become the dominant and the de facto&nbsp;global&nbsp;reserve currency as the world&rsquo;s most&nbsp;widely used currency for international trade and&nbsp;transactions.

Unfortunately, when the US is hurting, the pain&nbsp;spreads out across the world.

This also means that when the US is facing major&nbsp;inflationary pressures, such as what we have been&nbsp;seeing over the past year, and decides to continue&nbsp;increasing interest rates to bolster the US dollar,&nbsp;it simultaneously weakens emerging market currencies.

We learned from the IFC&rsquo;s Kareem Aziz,&nbsp;that this leaves many emerging markets vulnerable,&nbsp;and likely negatively affects emerging markets disproportionately. &ldquo;Unfortunately, until the US&nbsp;gets a hold of inflation, the continued increase in&nbsp;interest rates will lead to vulnerabilities in markets&nbsp;like Nigeria, Turkey, Egypt and Pakistan.&rdquo;

FED Rate Hikes 2022-2023 Show How the US Dollar's Status Might Have Global Implications

FED Rate Hikes 2022-2023

According to a report&nbsp;by Disrupt Africa, there were over&nbsp;400 fintech startups in Africa as of 2020, with total funding of over $1.3&nbsp;billion.

As of 2022, Lucidity Insights&nbsp;research has identified over 270&nbsp;fintech &ldquo;scaleups&rdquo;, which are defined&nbsp;as startups that have each raised a&nbsp;minimum of US $1 million.

IFC has&nbsp; been at the forefront of fintech in this region, providing funding and support&nbsp;to some of the most promising fintech&nbsp;startups in Africa.

Key Fintech Entrants in Africa

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