As technology drives the global finance sector, Africa is no exception; leveraging digital innovation to reshape financial inclusion and economic growth. While global perspectives often highlight Western advancements, Africa’s progress in fintech has been impressive and transformative.
In 2024, there are nearly 30,000 fintech startups worldwide and around 13,100 from the United States alone. This global fintech industry is projected to generate $201.91 billion in revenue, with Africa emerging as an important player.
Consumer Adoption and Mobile Technology in Africa
The high rate of mobile phone penetration in Africa, expected to exceed 613 million users by 2025, is one of the driving forces behind this fintech revolution. Services like MTN MoMo and Orange Money, which promote digital wallets and virtual cards, are facilitating payments in both urban and remote areas. The increasing adoption of mobile wallets supports various services such as tap-and-go payments, wearable transactions, and cross-border payments. For instance, Safaricom and Vodacom’s virtual cards linked to MPesa wallets are examples of innovation in cross-border payments and e-commerce.
Investments in Fintech and Challenges
Investment in African fintech reached a peak in 2021, though the volume of deals has moderated due to global economic uncertainty. Despite economic challenges and funding slowdowns since 2022, African fintech firms attracted approximately $1.55 billion in funding in 2023, with $900 million funneled into equity investments—a clear signal of global confidence in Africa’s potential in financial technology.
However, in 2024, African fintech remains a focal point for international and regional investors who are drawn by the continent’s youthful population, smartphone adoption, and the urgent demand for digital financial services. Key markets like Nigeria, South Africa, Egypt, and Kenya capture most investments, indicating both growth potential and room for further expansion in less-tapped regions.
The sector’s primary challenges include fragmented regulations, scarcity of capital for late-stage startups, and competition for top-tier tech talent. Some investors are turning toward local partnerships as part of a long-term strategy, as seen with traditional banks collaborating with fintechs to expand payment solutions. Key investors like Baobab Network and Launch Africa continue to back fintech ventures, focusing on solutions that promise long-term sustainability and inclusivity in Africa.
Leading African fintechs secured over 75% of the continent’s 2023 equity funding, with the top 10 startups raising $673 million. According to Afridigest, a media and information platform specializing in Africa, some of these fast-growing companies like MNT-Halan, TymeBank, and Moove reflect this investment trend, operating in areas ranging from digital banking to cross-border payments.
Moniepoint Inc raised $110 million in a Series C round, led by Development Partners International’s ADP III fund and supported by Google’s Africa Investment Fund and Verod Capital. This funding supports Moniepoint’s goal to become a one-stop business platform across Africa, enabling services such as digital payments, banking, and foreign exchange.
Nigeria stands as a key fintech hub in Africa, leading in both investment and transaction volume, alongside South Africa, Kenya, and Egypt. These four countries account for 91.8% of total funding raised between 2019 and Q1 2024. Nigeria alone facilitated 800 million transactions monthly, worth more than $17 billion. With this sector’s growth, the need for tailored solutions and regulatory frameworks has become clear as businesses navigate fragmented regulatory systems across countries.
Future Outlook: Beyond Payments
As fintech in Africa matures, new growth areas are emerging. Beyond individual payments, Business-to-Business (B2B) payments, digital lending, and supply chain digitization are gaining traction. In 2024, B2B payment providers are offering solutions such as prepaid virtual cards for streamlined expense management, targeting African businesses with innovative, data-driven tools for tracking and reconciliation. Additionally, fintechs are focusing on ESG (Environmental, Social, and Governance) standards, which appeal to socially conscious investors looking for sustainable financial solutions.
The future of African fintech holds tremendous promise. As regulatory environments evolve and partnerships flourish, the continent is well-positioned to lead in areas of financial inclusion and economic empowerment. African fintechs are redefining finance, aiming to close gaps in financial access and provide innovative solutions to both consumers and businesses.
