The Future of Fintech in Africa

Articles

India

Betting on Fintech in Africa: Why the Future of the Sector Lies on the Continent

Betting on Africa: Why the Future of Fintech Lies on the Continent

Fintech

Challenges & Barriers for Fintech Adoption in Africa

Africa as the Next Major Frontier: Challenges & Barriers for Fintech in Africa

The Drivers for Fintech Adoption in Africa

Africa as the Next Major Frontier: The Drivers for Fintech in Africa

Unveiling the Future of Fintech: Three Key Trends Shaping the Industry

Future Fintech Trends

United States

Essential Graphs for the Fintech Market in Africa

6 Graphs That You Need to Know about the Fintech Market Landscape in Africa

What Are the 6 Fintechs Unicorn from Africa?

Meet the Fintechs Dominating Africa’s Unicorn List

10 Graphs That Will Explain the Fintech Opportunity and Challenge in Africa

Here Are the 10 Graphs That Will Help Explain the Fintech Opportunity and Challenge in Africa

The future of fintech may well be in Africa... Here's why

The future of fintech may well be in Africa.

Infobytes

Global

2023 Funding in Africa Could be Below 2022 Levels Even Though They Have Secured an Impressive Half-Billion Dollars in Funding

2023 Funding in Africa Could be Below 2022 Levels

Top 3 Sectors Invested in Africa: Fintech, Logistics and Energy Are the 3 Top Sectors

Top 3 Sectors Invested in Africa, by Quarter (2019-2023 YTD)

Changes to Africa's VC Deal Mix and Exit Type

Changes to Africa's Venture Deal Mix and Exit Type

Entrepreneurship

Africa VC Funding 2021- Q3 2023 - The VC Winter is Hitting Africa Hard in Q3 2023

Africa VC Funding 2021- Q3 2023

MEA VC Funding & Deal Flow Quarterly Analysis 2022 until Third Quarter 2023 (excluding Israel)

Middle East & Africa VC Funding & Deal Flow, ex-Israel, Quarterly Analysis (2022 - Q3 2023)

Saudi Arabia

Growth of Mobile Money Accounts 2014 vs 2021

Mobile Money Account Growth in Africa, 2014 vs 2021

Fintech Unicorns and Soonicorn in Africa (Up Til February 2023)

Fintech Unicorns in Africa (Until February 2023)

Republic of South Africa

NowNow’s Feature Roadmap Shows the Growing Pains the Team had to Endure

NowNow’s Feature Roadmap

NowNow’s Customer Growth from 2019 to 2022

NowNow’s Customer Growth

NowNow’s Annual GMV & Unique Number of Transactions Shows Its Significant Contributing to Financial Inclusion for Underbanked Individuals

NowNow’s Annual GMV & Unique Number of Transactions

Sample of Car Ownership in Africa VS World According to the World Bank

Sample of Car Ownership in Africa VS World

Comparing Africa's Fintech Users Who Made or Received Digital Payments in the Past Year

Made or Received Digital Payments in the Past Year

Less Than 15% of Households in Sub-Saharan Africa Have Computers and Internet Access

Households with a Computer and Internet Access

The Percentage of Individuals Using the Internet in Africa Only Reaches 40% of the Whole Population

Percentage of Individuals Using the Internet in Africa

Evolution of Mobile Internet Connectivity in Sub-Saharan Africa is One of the Main Challenges to Propel the Fintech Ecosystem Forward

Evolution of Mobile Internet Connectivity in Sub-Saharan Africa

Top 4 African Markets for Fintech Funding Value & Volume in the Past 5 Years: Nigeria, South Africa, Egypt and Kenya

Top 4 African Markets for Fintech Funding Value & Volume

Africa's Global Bank Account Usage in the Past Decade

Global Bank Account Usage

Africa's Global Bank Account Ownership in the Past Decade

Global Bank Account Ownership

Q1 2023 VS Q3 2022 Funding Drops are Hard for Start-ups Worldwide, Especially Those Outside of the USA

Q1 2023 VS Q3 2022 Funding Drops

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

FED Rate Hikes 2022-2023

Some Key Fintech Entrants in Africa Invested in by IFC

Key Fintech Entrants in Africa

Africa's Funding Breakdown by Volume and Value from 2018 to 2022

Funding Breakdown by Type–Volume & Value

Volume and Value of Fintech Deals in the Top 3 Markets in Africa: Nigeria, Egypt, and South Africa

Volume and Value of Fintech Deals in the Top 3 Markets in Africa

Over the Past 5 Years, Average Fintech Deal Sizes by Growth Stage in Top 3 African Markets

Average Fintech Deal Sizes by Growth Stage in Top 3 African Markets

Ranking Movement Within 5 Top Fintech Markets, by Value Raised, Shows Nigeria has Consistently Held the Top Position

Ranking Movement Within 5 Top Fintech Markets, by Value Raised

Take a Look at These Top 4 African Markets by Overall Funding VS Fintech Funding Over the Past 5 Years

Top 4 African Markets by Overall Funding VS Fintech Funding Over the Past 5 Years

A Sample of the International Finance Corporation’s Fintech Investments in Africa

A Sample of the IFC’s Fintech Investments in Africa

Growth Rate of Financial-Services Market Revenue by Product in Africa is Growing Steady Annually

Growth Rate of Financial-Services Market Revenue by Product in Africa

Top 10 Most Funded Nigerian Startups in 2022

Top 10 Most Funded Startups in Nigeria (2022)

Breaking Down The Number of Fintech Scaleups Compared to Total Scaleups in Africa

Number of Scaleups in Africa vs Number of Fintech Scaleups

Rapid Growth in Africa's Fintech Deal Sizes: 2018 to Q3 2022

World's Median Fintech Deal Sizes: from 2018 to Q3 2022

Global Fintech Funding, Q4 2022: Africa’s Fintech Ecosystem Is Small and Growing

Global Fintech Venture Capital Deal Flow, Q4 2022

The Global and African Mobile Money Growth in 2020

Sub-Saharan Africa Constitutes >64% Of Total Global Mobile Money

Smartphone Penetration Rates of the Top 20 Markets in Africa

Smartphone Penetration Rates in Africa

Exploring Africa's Market Makers: Which Nations Stand as the Continent's Richest?

Ranking Africa's Wealthiest Countries

Africa's Amazing Potential for Scalability: Africa Population by Country (2021)

Africa's Amazing Potential for Scalability

Language Diversity and Fintech Adoption in Africa: the Challenges and Opportunities Across Eleven Key Markets

Language Diversity Across 11 Key Markets in Africa

Sample of Literacy Rates Across Key Markets in Africa (2021)

Literacy Rates in Africa

Internet Penetration Rates of the Top 20 Markets in Africa

Internet Penetration Rates in Africa

Special Reports

Special Report "The Business of Impact Investing in 2023"

The Business of Impact Investing in 2023

Sustainability & ClimateTech

Special Report: "The Business of Healthtech in MENA"

The Business of Healthtech in MENA

HealthTech

Special Report: "Sustainable International Trade for a Resilient Future"

Sustainable International Trade for a Resilient Future

Special Report: The State of the Electric Vehicle Revolution 2023

The State of the Electric Vehicle Revolution 2023

Mobility

Special Report: The Growing Business of Foodtech in the GCC

The Growing Business of Foodtech

FoodTech

Special Report: "Opportunities in Web3"

Opportunities in Web3

Crypto, Blockchain & Web3

Dubai's Venture Capital Ecosystem | Special Report

Dubai's Venture Capital Ecosystem

Diriyah and Saudi's the Giga Projects | Special Report

Diriyah and the Giga Projects: Defining the New Saudi Arabia

Tourism

Saudi Arabia's Startup Ecosystem Evolution 2010-2022

The Evolution of Saudi Arabia's Startup Ecosystem 2010-2022

Dubai's Digital Economy and Startup Ecosystem | Special Report

Dubai’s Digital Economy and Its Expanding Startup Ecosystem

MENA's M&A Landscape 2017-2022: A Comprehensive Review

The Middle East & North Africa’s M&A Landscape 2017-2022

Sustainable Innovations and Startups in the MENA Region

Innovations In International Trade

Economies

Egypt's Start-Up Ecosystem | Special Report

Egypt's Burgeoning Start-Up Ecosystem

Dubai’s Digital Economy Capital Roadmap | Special Report

Dubai’s Roadmap to Becoming the Digital Economy Capital of the World

The Electric Vehicle Revolution: Growth & Challenges Ahead

The Electric Vehicle Revolution Has Arrived

Bringing The World to Saudi

Shaping the Future of Fintech in MENA

Shaping The Future of Fintech

An ultimate guide to fintech in the Kingdom of Saudi Arabia

<a href="https://lucidityinsights.com/topics/fintech">Fintech</a> has come a long way from its emergence, just 25 years ago. It was 1998 when PayPal was established as one of the first modern-day global payments companies. As of the end of 2022, there exists well over 26,000 fintech companies globally of which 312 are unicorns, each worth over US $1 billion. Whether you&rsquo;re moving money between accounts on your banking app, sending money to friends to split the dinner bill, trading stocks online, or paying for your coffee with one-tap of your phone &ndash; all of this and more, falls under the fintech, or financial technologies, umbrella.&nbsp;&nbsp;

The growth of <a href="https://lucidityinsights.com/topics/fintech">fintech</a> and its global adoption has been steadily gaining over the years, and there have been many drivers. A significant turning point was the 2008 global financial crisis, which dramatically shifted consumer trust, perception and behavior, and increased demand for alternatives to the traditional financial banking system &ndash; fueling fintech innovations, including blockchain technology and digital currencies.&nbsp;&nbsp;

The general acceleration of smartphone ownership and the digitization witnessed across industries, sectors and markets over the past decade has also significantly contributed to more demand for fintech. Large fortune 500 companies that were operating as traditional brick-and-mortar businesses a decade ago pushed for plug-and-play fintech and e-commerce solutions that would take their businesses online. This trend was only accelerated by the pandemic, forcing even smaller businesses that had never contemplated online sales to digitally transform overnight. As a result, fintech has exploded.&nbsp;&nbsp;

Kareem Aziz, Global Head of Digital Payments Investments at the <a href="https://www.ifc.org/">IFC</a> says, &ldquo;We&rsquo;re really at a pivotal point in history, where for the first-time in human history, financial services is morphing from a vertical sector, to becoming an omnipresent horizontally integrated solution that will become an underlying infrastructure across every sector imaginable.&rdquo;&nbsp;

Fintech funding hit its record high in 2021, when the sector attracted US $131.5 billion in funding, accounting for 21% of the total global VC funding pie. Despite an overall shrinking of VC funding in 2022, fintech was remains the most funded category claiming 18% of total funding dispersed (US $75.2 billion).&nbsp;&nbsp;

Though African fintech startups only account for 2% of global fintech funding today, there are a number of drivers pointing towards Africa becoming the next great frontier of fintech. One tell-tale sign is that one-third (&gt;34%) of all scaleups in Africa are fintechs. Another is that out of the 7 unicorns birthed out of Africa to date, 6 are fintechs. Interswitch, OPay, and Flutterwave from Nigeria, Fawry from Egypt, Wave from Senegal, and Chipper Cash have all shown that unicorns can be born out of addressing financial inclusion on the African continent. Egypt&rsquo;s Fawry has even blazed a trail for what a successful IPO might look like.&nbsp;&nbsp;

&nbsp;

<img alt="africa fintech scale up" src="https://cdn.lucidityinsights.com/uploads/fintech-africa/articles/launch/1.png" />&nbsp;One of the world&rsquo;s most valuable privately held companies is fintech unicorn <a href="https://stripe.com/">Stripe</a>, currently valued at over US $95 billion; Stripe&rsquo;s US $200 million acquisition of Nigeria&rsquo;s payments platform PayStack in 2020 has largely been credited for turning international investors&rsquo; attention towards fintechs in the African entrepreneurial ecosystem.&nbsp;&nbsp;

The <a href="https://lucidityinsights.com/reports/the-future-of-fintech-in-africa">special report</a> details how African fintechs not only have one of the largest total addressable markets in the world; but is also critical in achieving global financial inclusion and empowering previously unbanked populations. The potential for real-world impact of a successful fintech operating in Africa seems to be unmatched by anywhere else in the world. Olayinka David-West, Associate Dean of <a href="https://www.lbs.edu.ng/">Lagos Business School</a> and inclusive finance advocate says, &ldquo;Show me a fintech that will cater specifically to the rural farmer, or a merchant trader, or a bus driver, and I will show you a fintech that will not only do well, but truly do some good.&rdquo;&nbsp;&nbsp;

<a href="https://lucidityinsights.com/reports/the-future-of-fintech-in-africa/read"><img src="https://cdn.lucidityinsights.com/uploads/fintech-africa/articles/launch/banner-2.png" /></a>&nbsp;Africa is home to 1.4 billion people, or nearly 1/5th of the world&rsquo;s population. 70% of Africa&rsquo;s economy or GDP is fueled by micro, small, and medium-sized businesses (MSMEs) and entrepreneurs. In fact, 80% of jobs on the continent are created by this MSME segment. Despite the continent being built and fueled largely by micro-entrepreneurs, less than half of these business-owners have access to financial services such as bank loans to help them scale their businesses. Though significant strides have been made in the last decade towards onboarding millions of unbanked individuals through mobile banking and other fintech solutions &ndash; still 57% of the general African population remains unbanked.&nbsp;&nbsp;

But herein lies both the challenge and the opportunity. Of those that are &ldquo;unbanked&rdquo;, it seems fintechs are paving the way to reach them. The incumbent banks are doing little to stop them, and fintechs seem more agile and better equipped to innovate financial products designed around individual use cases. As Walter Akpani, Managing Director and CEO of <a href="https://www.providusbank.com/">Providus Bank</a> says, &ldquo;It is our view that Fintechs have come to stay as significant players in the financial services ecosystem. They solve real problems that incumbents are too slow to address, and they are quick at responding to customers&rsquo; changing preferences.&rdquo;&nbsp;

<img alt="mobile money account growth" src="https://cdn.lucidityinsights.com/uploads/fintech-africa/articles/launch/2.png" />Today, 11 sub-Saharan African countries have more adults in possession of a mobile money accounts than a financial institution account. This trend is expected to continue according to Mark Elliott, Division President of Sub-Saharan Africa at <a href="https://www.mastercard.com/">Mastercard</a>. &ldquo;Development in infrastructure is important and the deployment of 5G in markets like South Africa, Nigeria, Kenya and Botswana &ndash; though still in its infancy &ndash; bodes well for the continent&rsquo;s future fintech progress.&rdquo; The hope is that further fintech expansion can occur when internet becomes more affordable and accessible to more segments of Africa&rsquo;s population.&nbsp;&nbsp;

<img alt="smartphone penetration rate in africa" src="https://cdn.lucidityinsights.com/uploads/fintech-africa/articles/launch/3.png" />The <a href="https://lucidityinsights.com/reports/the-future-of-fintech-in-africa">special report</a> identifies Africa&rsquo;s three dominant fintech hubs: namely Nigeria, South Africa and Egypt; these three countries are home to 62% of all fintech scaleups in Africa &ndash; scaleups are startups that have raised US $1 million or more in funding. These three countries also command nearly half (over 46%) of the entire continent&rsquo;s GDP. Kenya and Ghana round out the continent&rsquo;s Top 5 fintech markets.&nbsp;&nbsp;

<img alt="fintech funding in africa" src="https://cdn.lucidityinsights.com/uploads/fintech-africa/articles/launch/4.png" />In 2020, Africa&rsquo;s total financial services market revenue totaled US $150 billion. By 2025, that figure is expected to reach over US $230 billion. No matter how you cut it, that&rsquo;s no small pie. Building a fintech solution that can onboard even a fraction of the &gt;780 million unbanked or underbanked African population can make big business. Capturing just 1% of this market would garner you 8 million customers.&nbsp;&nbsp;

And there are many fintech success stories coming out of Africa, and some are even expanding globally beyond the continent. Ladi Delano and Jide Odunsi, co-founders of a mobility fintech startup called <a href="https://www.moove.io/">Moove</a> are just one example. &ldquo;Moove was born out of the urgent need to solve the problem of mobility entrepreneurs in Lagos who, despite working for years, still didn&rsquo;t own their cars (which they drove for Uber and other mobility platforms) due to a lack of access to credit,&rdquo; says Delano.&nbsp;&nbsp;

Odunsi adds, &ldquo;we subsequently discovered that this problem was faced by millions of other mobility entrepreneurs around the world, preventing them from moving up the socioeconomic pyramid.&rdquo; Moove&rsquo;s mission is to financially empower every mobility entrepreneur in the world by welcoming them into the global financial system using Moove&rsquo;s proprietary credit scoring products and fintech platform. &ldquo;We think Moove&rsquo;s success demonstrates that there is still tremendous potential for growth and investment on the continent,&rdquo; says Odunsi.&nbsp;

Sahir Berry and Mahesh Nair are co-founders of Nigerian fintech <a href="https://nownow.ng/">NowNow</a>, a digital bank focused on providing consumers and merchants with fintech solutions tailored to their needs.&nbsp; &ldquo;Meeting the needs of the SMEs is critical on a macroeconomic level,&rdquo; says Berry. &ldquo;SMEs and micro-businesses are enormous drivers of economic growth across Africa, but the majority lack access to the tools and financial services they need to thrive.&rdquo;&nbsp;&nbsp;

&ldquo;Managing working capital within small businesses are challenging. If we can offer MSME owners an opportunity to pay for their inventory in installments, it could be a game-changer,&rdquo; explains Nair.&nbsp;

Beyond the current opportunity that already exists today, is the incredible pace of growth presented by Africa. Nigeria alone is home to over 213 million people, and economists believe that Nigeria will become the second most populous country in the world by the turn of the century &ndash; reaching nearly 550 million by 2100; falling in line just behind India, and surpassing China&rsquo;s shrinking demographics. Today, Nigeria is already Africa&rsquo;s largest economy, and the 27th in the world in terms of purchasing power parity. Nigeria&rsquo;s economy is roughly the same size of that of Austria&rsquo;s, and is already the number one fintech market in Africa, attracting the most venture capital funding and producing the most fintech startups and unicorns on the continent.&nbsp;

Matthew Francis, Chief Strategy and Investment Officer at <a href="https://www.nownow.ng">NowNow</a> says, &ldquo;We see more and more investors getting excited about the fintech opportunity in Africa. Ultimately, we think the African fintech opportunity is too big to ignore.&rdquo;&nbsp;

<h3>To read more about the drivers, barriers and the opportunity of fintech in Africa, as well as strides made towards financial inclusion &ndash; read the full report <a href="https://lucidityinsights.com/reports/the-future-of-fintech-in-africa">here</a>.&nbsp;</h3>

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<a href="https://lucidityinsights.com/reports/the-future-of-fintech-in-africa/read"><img src="https://cdn.lucidityinsights.com/uploads/fintech-africa/articles/launch/banner-3.png" /></a>

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Spotlights

Providus Bank, the Bank Supporting Fintechs in Nigeria

Providus Bank: The Bank Supporting Fintechs in Nigeria

Olayinka David-West, Associate Dean of the Lagos Business School: Achieving Financial Inclusion Will Require a New Kind of Customer-Obsessed Fintech

Olayinka David-West: Achieving Financial Inclusion Will Require a New Kind of Customer-Obsessed Fintech

Moove: Bringing Financial Inclusion to Mobility Entrepreneurs in Africa and the World

Moove.io: Financial Inclusion for Mobility Entrepreneurs

In Conversation with Mark Elliott, on Mastercard’s Role in Fostering Fintech in Africa

Mastercard’s Role in Fostering Fintech in Africa

IFC (International Finance Corporation) on Fostering Financial Inclusion via Fintech Investments in Africa

The Future of Fintech in Africa

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