African Fintech - Afrikan Heroes

More African Fintech Became Active in Last Two Years

August 25, 2023

There are encouraging signs within the African fintech architecture as the fintech startup ecosystem continues on its growth trajectory, with the number of startups operating in the space increasing by 17.7 per cent to 678 in 2023 as compared to 2021.

This is according to the latest edition of Disrupt Africa’s Finnovating for Africa publication, released every two years since June 2017, which tracks the extraordinary development of the fintech ecosystem across Africa over the last few years.

The fourth edition of the report is released in partnership with AZA Finance, an African fintech company offering secure and efficient financial infrastructure for payments, foreign exchange, and settlement; and Curacel, an insurance infrastructure company that helps insurers and partners in Africa and other emerging markets increase the reach and functionality of insurance through cloud-based tools and APIs.

It finds that fintech is still comfortably the most-populated vertical within Africa’s wider tech ecosystem, having maintained its steady growth over the last two years. The growth rate of 17.7 per cent to 678 ventures from 576 in 2021 is similar to that witnessed between 2019 and 2017, when the number of active ventures increased by 17.3 per cent. Overall, the number of fintech startups active in Africa has increased by 125.2 per cent between 2017 and 2023.

This growth is taking place across the continent, with all major markets bar South Africa posting an increase in the number of active ventures. Egypt and Nigeria are growing especially fast, with the number of fintech companies based in those countries leaping by 66.7 per cent and 50 per cent respectively over the course of the last two years.

Startups continue to launch at a steady rate. Almost 40 per cent of currently active fintech ventures were launched between 2019 and 2021, and though numbers for 2022 and 2023 look lower for now, there will undoubtedly be many startups that formed more recently that have yet to flick across our radar.

The maintained growth trajectory of the African fintech startup ecosystem is even more impressive when one considers the relatively high churn rate within the sector. Of the 576 startups included in the 2021 edition of this report, 115 – 20 per cent – have since ceased to operate.

“It is clear that African fintech is in its prime, driving forward financial inclusion and powering the commercial revolution occurring on the continent,” said Disrupt Africa co-founder Tom Jackson.

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry

Africa Fintech Sales to Reach $ 30 Billion by 2025: McKinsey

August 31, 2022

From all indications, the potential of Africa’s fintech is yet to be scratched as revenue may soar to eight times higher than in 2020 as a growing, young and underbanked population gets more access to the Internet.

In a new report by McKinsey & Co, Africa’s fintech company revenue may soar to US$30.3-billion by 2025 — eight times higher than in 2020 — as a growing, young and underbanked population gets more access to the Internet.

The anticipated increase is part of a rapid expansion in financial services income that’s expected to grow to $230-billion from $150-billion over the same period, the consulting company said in a research report published on Tuesday.

About two-thirds of Africa’s 1.3 billion people don’t have a bank account or full access to financial services, and 90% of all transactions on the continent are still cash-based, according to the report. That creates a growth opportunity for fintech companies.

“African fintech is emerging as a hotbed for investment, with average deal sizes growing and the proportion of fintech funding in Africa increasing over the past year, bringing jobs and growth to African economies,” McKinsey said. “And the story is only just beginning.”

Financial services revenues in Ghana and francophone West Africa will enjoy the fastest growth, with Nigeria and Egypt the next quickest, it said.