‘Why African fintechs will continue to trend’

‘Why African fintechs will continue to trend’

The African Financial Technology (Fintech) ecosystem continues to expand despite global economic challenges.

As an investment segment, the Fintech industry made up more than 25 percent of all venture capital rounds in the last few years, with South Africa joining other regional leaders such as Egypt, Nigeria and Kenya.

Out of the nine notable tech unicorns in Africa, seven are fintech companies.

A recent study by Mastercard noted that African Fintech startups increased in number from 311 in 2019 to 564 by 2021.

The study also noted that of the $2.7 billion in venture capital funding that was deployed in Africa in 2021, 61 percent of that was in Fintech startups.

The study found that the sub-Saharan Africa region had one of the highest year-on-year growth rates globally, with Fintech startups recording 894 percent year-on-year growth in funding in 2021.

With the right targeted solutions, the potential for rapid growth is significant.

In the last few years, the region also saw the majority of Fintech investment capital coming from various offshore money markets, including west-coast United States, the United Kingdom and China.

African Fintech startups are also able to do more with dollar-based capital raises if they have locally-based operations.

Mobile money and third-party payment systems in particular are