Revenue for fintech in Africa could grow eight times, reaching $30 billion by 2025

Buying and paying online is likely to become the more preferred way of doing financial transactions on the African continent in the near future. According to a report by McKinsey and Company, titled Fintech in Africa: The end of the beginning, fintech revenues could grow eight times, eventually reaching $30 billion by 2025.

The report findings point to one striking revelation: that fintech on the continent has grown at an unprecedented rate.

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McKinsey noted that between 2020 and 2021, the number of tech startups in Africa tripled to around 5,200 companies, with just under half of these being fintech.

Rashi Gupta, Chief Operating Officer at MFS Africa, a digital payments hub in Africa, noted that this was particularly exciting in an age where customers value solutions that allow them to transact across borders, and provide best-in-class solutions to Africa’s unique challenges.

Africa – a mobile money leader

According to an IMF developmental paper, titled ‘FinTech in Sub-Saharan African Countries: A Game Changer?’, mobile money has underpinned a radical change in the delivery of financial services in sub-Saharan Africa. As a result, the region has become the global leader in mobile money innovation, adoption, and usage, with around 40 out of 45 sub-Saharan African countries actively using this financial technology.

The study noted that Sub-Saharan Africa leads the world in mobile money accounts per capita, mobile money outlets, and volume of mobile money transactions.

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Head of Strategy and Marketing at upnup, Justin Asher, notes: “As both connectivity and devices (predominantly smartphones) have become cheaper and more prevalent in recent years, a growing number of African consumers have come to expect the same kind of experiences as their peers around the world do. Aided by the COVID-19 pandemic, this confluence of affordability and ubiquity helped fuel significant growth in areas such as e-commerce and online entertainment.

“These factors have also allowed hundreds of entrepreneurs to address critical financial roadblocks in a number of areas including mobile money and digital banking, lending, savings, investment and crowdfunding, and cryptocurrency. And the proliferation of fintechs in Africa is set to grow.”

*Compiled by Devina Haripersad