Fintechs across Africa attract $1.64b investment, 61% of startups
By Jeph Ajobaju, Chief Copy Editor
Fintechs across Africa attracted $1.64 billion funds in 2021, accounting for 61 per cent of total $2.7 billion raised by startups on the continent, with South Africa, Nigeria, and Kenya as the hubs of digital payments.
African fintechs grew 81 per cent, according to a new study by Mastercard titled, “The Future of Fintech: Rapid Growth Attracts Smart Capital”, which found fintechs accounted for 27 per cent of a record-high number of deals closed.
Fintech innovation in Africa is driven by the need to resolve multiple pain points, the study added, with a focus on increasing financial and digital inclusion with South Africa, Nigeria, and Kenya leading the continental transition to digital payments.
“It is encouraging to witness the growth of the fintech landscape across the region, creating multiple opportunities for startups, scaleups, enablers, and micro, small and medium enterprises to bring more people into the digital fold.
“At Mastercard, we are helping to fuel fintech acceleration by offering access to our expertise, network and technology,” said Ngozi Megwa, Mastercard Senior Vice President, Digital Partners and Enablers, Eastern Europe, Middle East and Africa.
“We provide a portfolio of technology solutions, APIs, developer tools, partner network, startup programs, and a community experience for every fintech company and payments developer, helping turn their bold ideas into reality.”
The study shows the role of MSMEs is crucial to fintech growth, and that MSMEs use fintech and ecommerce solutions to scale, source, and reach.
__________________________________________________________________
Related articles:
Tech startups create nearly 20k jobs, fintechs lead the charts
e-payments increase to N205.5tr in momentum gain
Mobile bank financial transactions rise to N1.8m
_________________________________________________________________
Shaping commercial landscape
The growth in alternative payment rails and emerging platforms are shaping the commercial landscape, the report said, according to reporting by The PUNCH.
“Buoyed by demand, fintech has seen products based on multi-faceted innovation in emerging and mature economies.
“Providing scalable financial services using the internet, blockchain, and algorithms, fintech companies have widened the reach of financial services traditionally offered by banks, including loans, payments, investments, or wealth management.
“Regulators across various countries in Africa have adopted a collaborative approach to enable the introduction of new solutions by fintech companies.
“Africa has proactive regulators who foster innovation for financial, digital, and economic inclusion.
“45 per cent of the population in Africa does not have an official identity, making eKYC a seamless entry point for fintech.
“Nigeria is one of the first regulators in Africa to mandate open banking frameworks, along with financial services data protection rules.”