What the future holds for fintech in Africa

by Oct 17, 2023Insights

Roughly 1.4 billion people call Africa home and more than half of these citizens do not have a bank account. This is why the African fintech sector is one of the fastest growing in the world, attracting the likes of telcos and multinational corporations. Most citizens have access to a cell phone and SIM card, meaning that the opportunity to provide digital wallets for mobile money is massive.

The rise of fintech and mobile money in Africa is spurred on by providing financial freedom to the unbanked. Telcos and fintech providers can reach citizens where banks cannot. Currently, the top five countries for fintech investment are South Africa, Nigeria, Egypt, Kenya and Ghana. These are multibillion-dollar industries that are still growing at a rapid pace.

So what can we expect from Africa’s fintech market in the future? Financial freedom and digital innovation are certainly key aspects that will improve the lives and economies of Africans and their nations, but fintech will continue to evolve into an industry that we cannot fathom today. Many countries still lack laws and regulations for the fintech sector, which can hinder foreign investment, but this has not stopped companies from joining the race.

A reflection of a large city on a glass panel, behind which sits a computer screen with a fintech growth chart on it.

Opportunities for fintech in Africa

At the moment, fintech funding and deal sizes are smaller in Africa than in the rest of the world. Seed cheque sizes in the top three markets in Africa average between $3 million and $10 million. This is due to Africa being a ‘frontier market’ with fewer regulations and structures. But the market is the fastest-growing in the world, which proves that investment is ramping up.

The continent is too large and too lucrative to ignore. The smartphone, telecommunications and internet connectivity sectors are expanding rapidly. On top of this, a youthful population that is tech-savvy provides an almost perfect environment for fintech adoption and digital banking solutions.

Besides reaching a young and unbanked population, fintech is also helping small businesses and entrepreneurs. Over 70% of Africa’s gross domestic product (GDP) is created by SMEs. These small companies need funding and a reliable way to transact, especially in remote areas of Africa. The fintech sector is expanding financial services to millions of businesses, where 90% of transactions are currently done with cash.

Nigeria, South Africa and Egypt are the three largest economies on the continent, accounting for 46% of Africa’s total GDP. Finch in these three countries alone can provide financial access to 440 million people and nearly half of the continent’s wealth. However, there are challenges when it comes to mass adoption of fintech services and mobile wallets.

Composite photo of a human hand cupping a digital fintech growth chart

Challenges facing fintechs

Of the top 11 markets in Africa, there are four official languages spoken between them – English, Arabic, French and Swahili. Mass adoption requires a linguistic understanding of the apps and services provided. There are nearly 2000 unique languages spoken in Africa, so fintech providers need to offer solutions to language barriers if they are to allow for easier product management and scalability.

Literacy rates also play a role in fintech adoption and financial inclusion. South Africa has the highest literacy rate on the continent; 94.4% of South Africans over the age of 15 can read and write. This is partly why the country was the first to develop a fintech ecosystem. Research has shown that there is a clear link between literacy and technology adoption, both generally and for financial services.

Another challenge to address is internet penetration rates. Without access to reliable internet, mobile wallets and fintech services become unusable. There are only four countries in Africa with internet penetration rates that are higher than the world average; Morocco, Egypt, South Africa and Tunisia all beat the average of 62.5%.

Only half of Nigerians have access to the internet, meaning that 49% of their population is out of reach for fintech providers. This is why connectivity and infrastructure go hand-in-hand with financial technology. In order to reach the unbanked and underserved rural communities, internet providers and fintechs should collaborate.

Similarly, data prices are a concern in many African countries. Smartphones are essential for accessing fintech apps, but if the data is too expensive, then citizens are less likely to use these technologies. Many telcos offer fintech services of their own, so they need to ensure that data prices are affordable, otherwise, they are shooting themselves in the foot.

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The growth of mobile money in Africa

Half of all registered and active mobile money accounts globally are based in Africa. These account for around 30 billion transactions worth $500 billion. Sub-Saharan Africa constitutes 64% of all global mobile money. According to the World Bank, mobile money plays a key role in reducing poverty and lowering transaction costs. 

Many Africans live and work outside of their native countries – relying on mobile money services to send money home to their families. These services are more affordable and have a lower transaction fee than traditional banking services and cross-border payment systems, like Western Union. Fintech and mobile money have become staple financial resources for much of Africa’s diaspora.

This trend is likely to continue in the future as people search for more affordable ways to send money across borders to support their loved ones. Mobile money services also offer convenience and reliability, making them more attractive solutions than banks and money exchangers.

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What the next decade will bring

Over the next 10 years, fintechs in Africa will start to offer more customised solutions for niche population segments, such as farmers. These tech companies are more agile and cost-effective than traditional financial institutions, which are slowed down by legacy technologies and older business models. This makes fintechs better positioned to reach the unbanked and underserved portions of Africa’s population.

The old way of achieving financial inclusion was to educate underserved communities about finance. The new way is for financial institutions to educate themselves about their target markets and how they can seamlessly integrate their services with the lives of Africans. New customer-centric fintechs are making waves in the sector with interesting business models and innovative offerings.

Another trend we’re likely to see is investments in the fintech sector being based upon systems-building and integration, rather than inclusivity. This will make financial services more of a horizontally integrated foundation for the underlying infrastructure of all sectors, as opposed to the current vertical nature. The next 10 years will be defined by integrating financial services into day-to-day economic transactions.

The adoption of fintech in Africa is already being driven by several factors, such as growing levels of mobile phone penetration, rising internet access rates and the growing demand for digital financial services. Fintech companies are leveraging mobile technology to provide innovative solutions to underserved populations across the continent.

Fintechs and telcos in Africa need a reliable IT services and software partner, such as 4C Group, to provide the foundations for their digital products. We offer several fintech services that are built around our innovative iNSight software. These services are designed to resolve the payment issues that Africans face. 

By developing custom software applications for financial service providers and fintech companies in Africa, 4C Group helps to provide secure, transparent, affordable and easy-to-use fintech solutions that cater to the needs of African fintech companies. If you’d like to find out more about these offerings, please contact us today.


At 4C Group of Companies, we strive to effect operational changes and cost savings for customers through our iNSight product and associated services. This product’s main function is to re-purpose and deliver business-critical information to a variety of systems and stakeholders. 

We specialise in information management, business assurance, fintech solutions and a variety of cyber security services. For more insights into our products and services, check out our blog page or follow us on Facebook, LinkedIn and Twitter.

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