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.
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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.”
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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.
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