Financial technology is here to stay in Nigeria as it takes the lead in Africa as the biggest financial technology industry which attracted a revenue of about $122 million in funds in 2019. This was disclosed in the 2019 African Tech Startup Funding Report. The report stated that African tech startups, with 311 companies secured $49.6 million worth of investment in 2019 and Nigeria got 24.8% of that fund. The number of investors in African tech startups jumped by 61% to reach 261.
The report in full tells us how Kenya and Nigeria skyrocketed as the lead investment locations in Africa 2019 attracting $149 million and $122 million respectively.
Not all African countries are slacking in this industry as Egypt is also on the rise to become a continental tech hub with new startups originating from their side than anywhere else. While most countries are growing fast South Africa, Ghana, and Uganda to name a few seem to not be getting it right.
Important information about fintech: the sector remains the no 1 go-to for popular investors, regardless of the fact that its share of total funding fell to 21.8% as other sectors experience a rise.
The report also provided in-depth information on the funding activity in six African countries, the number of deals per location and average deal sizes; data on growth in funds and deals over the past five years.
Highlights of the FinTech industry
With the presence of new companies into the payment services market, strengthening of the financial networks. Most customers had to migrate to a cost-effective and efficient service provider. Here are some of the big names for 2019
Visa/Interswitch
- 12, 2019, Interswitch and Visa announced a strategic partnership to improve the digital payment platforms across Africa.
- In accordance with the partnership deal visa acquired a minority equity stake in Interswitch which was about $200 million valuing Interswitch at about $1 billion.
- was created in 2002, and it reportedly generates annual revenue of N30 billion, implying that its current value is ten times its current revenue. The company is also valued higher than UBA (N225 billion), Access Bank (N327 billion) and First Bank Nigeria (N208 billion). Zenith Bank is still valued higher than Interswitch which it owns about 5% stake of the company, making bank to be valued at N538.4 billion.
TeamApt
TeamApt which is a Nigerian fintech startup generated $5.5 million capital in a series round led by Quantum Capital Partners in February. The company is expected to use the funds to expand its white-label finance products and also its customer finance with the launch of is AptPay banking app.
Hurdles of the industry
The industry also has some challenges. Like lack of established database, strategic partnership and corporate governance limitation amo0ng others. The industry is still growing and has a long way to go.
FT Partners made a statement that the nation has a long way to go to be the Giant of Africa, especially in the aspect of financial inclusiveness, which is farther than it appears, as its payment platforms fell behind other African nations like Kenya and South Africa.
In FT Partners Fintech industry research, it found that ^% of the nation’s bankable population has mobile money accounts. The report, which was obtained by Nairametrics, rated the most populous black nation behind Kenya’s 73% and South Africa’s 19%. Other factors that Nigeria fell behind are smartphones penetration (27%). accounts in financial institutions (39%) and debit/credit card ownership (35%) all fell behind Kenya’s 60%,56%,44% and South Africa’s 64%,67%,43% respectively.
In all Emefiele explained that as part of the bank’s priorities for 2020, it would also, sustain these efforts in 2020 as part of its plan to reduce the financial exclusion rate to under 20% over the next year.
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