The African Fintech Sector Registers Unprecedented Boom

The African fintech sector is growing fast and has been booming for some years now. It covers a wide range of activities, including foodtech, edtech, and even regtech. According to specialists, this dynamic is not about to stop.

According to Mc Kinsey, there seems to be no stopping fintech companies in Africa, and the outlook is promising. The latest estimates put sales at $30.3 billion by 2025, eight times higher than in 2020. One tech entrepreneur speaks of an “unprecedented upheaval”, particularly in the payment of wages and advances, mobile money, and “peer 2 peer” (P2P). This is a system for sending money from a card or bank account using a mobile device. Using a P2P wallet, it’s possible to connect multiple money transfer accounts and make P2P transfers from a single location.

Read more about the African fintech sector and find the latest financial news of the day with the Born2Invest mobile app.

The African fintech sector is not homogenous

Experts explained that the arrival of fintech platforms on the continent has had a major impact on the payment of salaries and deposits. These services are often more accessible and less costly than traditional financial services, helping to reduce the barriers to financial inclusion, but also making promoters financially happy.

However, the growth and development of the African fintech sector is not uniform across Africa. According to these specialists, Kenya, Nigeria, South Africa, Senegal (first in French-speaking West Africa), Cameroon (for some time now), Ghana, Uganda (especially in nano-credit), Côte d’Ivoire, Egypt (with tontines), Algeria and Morocco are leading the way, with the last two countries lagging behind their African neighbors.

The accelerating role of central banks in Africa

In some countries, especially those with English-speaking populations, “the pace is fast and growth is strong, thanks not only to demographics but also to language, which creates a close relationship with investors,” said the experts.

In this respect, the tech entrepreneur pointed out that “the fact of having central banks specific to each country plays an accelerating role for countries that are not part of a monetary community”.

However, many challenges remain. It is imperative that fintech companies in Africa and regulators speak with one voice and stop living in parallel worlds. One of the major challenges for the African fintech sector is regulation, technology security, Internet network coverage, and the availability of funds for fintech companies, but also for retail disbursements. The entrepreneur regrets that “our lawyers are mostly generalists, with little understanding of the due diligence phenomenon. The few specialists in these fields are unaffordable.”

__

(Featured image by Blake Wisz via Unsplash)

DISCLAIMER: This article was written by a third party contributor and does not reflect the opinion of Born2Invest, its management, staff or its associates. Please review our disclaimer for more information.

This article may include forward-looking statements. These forward-looking statements generally are identified by the words “believe,” “project,” “estimate,” “become,” “plan,” “will,” and similar expressions. These forward-looking statements involve known and unknown risks as well as uncertainties, including those discussed in the following cautionary statements and elsewhere in this article and on this site. Although the Company may believe that its expectations are based on reasonable assumptions, the actual results that the Company may achieve may differ materially from any forward-looking statements, which reflect the opinions of the management of the Company only as of the date hereof. Additionally, please make sure to read these important disclosures.

First published in LaPresse.tn. A third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.

Although we made reasonable efforts to provide accurate translations, some parts may be incorrect. Born2Invest assumes no responsibility for errors, omissions or ambiguities in the translations provided on this website. Any person or entity relying on translated content does so at their own risk. Born2Invest is not responsible for losses caused by such reliance on the accuracy or reliability of translated information. If you wish to report an error or inaccuracy in the translation, we encourage you to contact us