Over 65% of the adult population in the African continent are not learned and their financial sector is considered to be underdeveloped or not efficient, yet fintech has been introduced to them all as a new revolution solution and it seems to be boosting the financial infrastructure of Africa as a whole.
As there is a huge increase in population, an increasing growth rate of smartphones and internet providers, all infused with a great need for financial development. Africa is like everyone’s gold mine for the development of fintech and tech giants (Paystack, Ren Money, Quidax to name a few). There is great potential in this aspect because smart entrepreneurs are seeking to input technological advancement to secure more customers and provide relevant solutions to their daily problems. Most fintech companies in the continent, for example, are closing gaps on current problems in various industries like, healthcare, transportation, mobile money services, and they are doing this way better and more efficiently than our traditional banks.
The fintech industry in Africa as a point of discussion offers more than just improved financial services. For example, its innovative spirit has created new careers for everyone both learned and not learned especially young talents. Fintech is also providing solutions for mobile payment platforms, from e-commerce to credit lending and blockchains as a liquid tender. These are factors that have helped with the growth of small and medium startups and companies across Africa. With this in mind, most fintech startups in various sectors have raised more capital in the last 4 years when compared to other sectors. In 2019 alone African tech sectors were overthrown by fintech companies who ranked in more venture capital investment of about $285M.
The Global Fintech Index 2020 shows that 60% of the global GDP will be digitized by 2022, with growth in every industry driven by digitally-enhanced offerings, operations, and relationships. The report goes on to say that continuous and digital financial services are the key to “offer the best chance to drive global trade in 2020, improve access to financial service, and open opportunities – for marginalized citizens, poorer communities and small businesses and entrepreneurs alike”.
African countries that are making it big in the fintech sector are Nigeria, South Africa, and Kenya. The number of fintech companies in the sub-Saharan Africa region has recorded a 24% compound annual growth rate, over the past decade, with local fintech companies taking up the larger share of the sector at 80%, while international players at account for 20%, according to Ernst & Young. Nigeria, Kenya and South Africa are not far behind in the continent concerning the fintech sector, and there are breaking barriers in 2020 too. They were listed 52nd, 42nd, and 37th respectively in the index, also Ghana, Egypt, and Uganda are 58th, 60th and 64th respectively. So some of the fintech processes which these countries possess are a cryptocurrency, digital banks, banking & lending, personal finance, SME financing, payments, enabling processes & technology and equity funding.