Every once in a while, the field of innovation and entrepreneurship sees a new trend taking the lead, influencing the market and dominating the headlines. After the age of social media, location services and now the sharing economy period (the list goes on and on), 2019 is marked as “the year of Fintech”.
With a variety of technological advancements and innovations (mainly blockchain and challenger banking technologies), the number of ambitious companies in the field has been steadily increasing. So is the money invested in the sector, with the belief that Fintech has the potential to impact billions of people around the world.
The hot trend isn’t exclusive for startups and young companies: in the last years, we’ve witnessed some tech industry giants taking the lead with products like Apple Pay and AliPay, with others are expected to reveal more services soon.
In Africa too, Fintech is not left behind. In fact, it is simply the opposite: African Fintech companies raised the most funds out of all the sectors in 2018, raising $ 284.6 million, nearly double the next sector on the list (clean-tech companies, with $ 143.5 million), reflecting the tremendous potential investors recognize.
The continuous rise of Fintech in Africa (a 24% increase over 10 years) is not only a result of the technological potential of the companies: it also reflects the huge potential to impact the lives of hundreds of millions of people, far more significantly than in the US but we have two different realities, In the United States, the vast majority of the population – 93.5 per cent in 2017 – had a bank account while Nigeria’s unbanked population stands at 37% – CBN in 2018 this is why the average transaction fee can go from 9.5 per cent in Kenya to 18.3 per cent in Nigeria – at best case, more than 6 times the average in the US, which is ~1.5 per cent, according to new times.
Fintech is emerging, influencing the global economic sphere, yet its impact will be different in every continent. For the vast majority of the US population, it’s still a “nice-to-have” product, which will create a better, more convenient, user experience.
The real potential for impact is in Africa. For hundreds of millions of unbanked people with no real solution designated for their needs, the Fintech sector can be much more than a “nice-to-have” solution. It can be a real disruption, leading the way to a much better financial reality.
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