Fintech is the use of technology in the financial sector.
It can be used to improve the efficiency and reach of existing financial services, or to create new ones. Fintech has been growing rapidly around the world, but it’s grown faster in Africa. There are reasons for this: lower costs, increased mobile phone usage, an emerging middle class, and a high percentage of unbanked citizens looking for ways to get access to financial services.
Top countries by fintech investment in 2021
Africa is unmistakenly a hotbed of fintech activity as can be seen in the growing list of African countries that rank among the top fintech hubs worldwide. Nigeria, South Africa, Egypt, and Kenya fintech respectively were the most funded in 2021 according to the African Tech Start-ups Funding Report.
The report indicates that 564 African tech start-ups raised a combined $2,148,517,500 in 2021 with Nigeria getting the largest share, followed by South Africa, Egypt, and Kenya bringing up the rear. Notably, Nigeria’s impressive figures were driven by major rounds secured by Flutterwave ($170 million), Kuda ($25 million and $55 million), Moove ($63.2 million), and FairMoney ($42 million). It has spawned unicorns – Flutterwave and OPay.
Kenya vs Nigeria: Who rules Fintech in Africa?
Which country is best positioned for future growth?
In my view, there are three key factors that will determine which nation dominates Africa’s fintech sector: infrastructure, funding opportunities, and culture/sensibility (which I’ll call “innovation”).
Let’s start with Kenya.
- Kenya has a better track record of innovation and adoption
- Kenya is able to co-exist with current banks and financial institutions.
- Kenya has been an emerging leader in mobile money and financial inclusion, with M-Pesa leading the way as Africa’s most successful fintech product.
- Nigeria admits there are lessons to learn from Kenya’s fintech practice of adopting from local ecosystems.
Now onto Nigeria
- They have two unicorns – Flutterwave and OPay.
- Nigeria has attracted most of the fintech funding in the continent.
- Nigeria’s huge population makes for an even bigger market with even bigger numbers.
Here is the tiebreaker.
Be sure to attend Africa Fintech Summit happening so that get to know the latest trends happening in the African fintech landscape and interact with key people influencing the sector. See you there!