written by Lukman Usman

edited by Araoluwa Abdulazeez Ogundairo

Africa and the rise of the Fintechs

Despite it being arguably just the latest update to the millennia-old evolution of credit, contracts, and banking, FinTech is one of the most explosive fields of the past and present decades. Venture capitalists, angel investors, traditional finance firms, governments, and the users each contributed to the massive improvement of its development in Africa as a whole.  Advancements like cross-border payments, app-based stock trades, and automated financial claims became easy to operate.

Africa insight in fintech and approaches.

The year 2021 saw larger deals closed in Africa, as tech startups across the continent raised close to $5 billion and it is predicted to contribute $150 billion before 2025.  Fintechs dominated the fundraising, accounting for nearly $3 billion, or two-thirds of all the investment realized by startups across the continent last year, a report by markets insights firm Briter Bridges shows. This amount was also more than double the $1.35 billion investment that fintech in Africa raised in 2020, and it’s three times the amount raised in 2019.

In 2012, Y-combinator, a USA-based company that invests in start-ups, accepted its first Africa-focused startup, Wave, a fintech startup in Senegal. Every year since then has seen at least one African startup get into the famous accelerator programs.

Kenyas’ fintech revolution, significantly contributed 82.9 % to the country's finances making it the highest in Africa. However, the African development bank has enhanced its attention towards the direction of landmark achievements by the Kenyans. In 2020, South Africa was ranked 37th in the world among fintech game-changer alongside other African countries by Global Fintech Index City.

Nigeria Fintech background

In Nigeria, like in other parts of the world, fintech is a buzzword, with the companies sprouting and operating in different niches

Home to Africa’s largest population, Nigeria plays a pivotal role in fintech ecosystem growth in Africa which is largely driven by increasing smartphone penetration and a massive unbanked population. Nigeria is ranked among the top three fintech hubs in Africa. This is a mean feat considering how fintech has evolved in Nigeria despite a series of challenges that are attached. Fintech space in Nigeria should be regarded major contributor to the nation’s pulse.

It took Nigeria fintech an average of 3 years, 6 months, and 23 days to become a unicorn in status. This shows how impact they have contributed on the nation's prosperity.

An ecosystem that consists of consumers, financial institutions, fintech start-ups, investors, regulators, and educational institutions. This has created an opening FinTech companies have been quick to take advantage of, with many stepping up to develop enhanced propositions across the value chain to address pain points in affordable payments, quick loans, and flexible savings and investments, among others.