Fintech startups in Africa continue to outshine other startups in funding raised. According to African Tech Startups Funding Report, African startups received a total of $1,123,556,000 during the first two months of 2022 with 34 fintech getting $434,296,000 or 38 per cent of the investment cake. African Private Capital Activity report shows that fintech in Africa received 30 per cent of the $7.4 billion private capital deals raised last year.
At the 8th Africa Bank 4.0 Bank Summit, Dr Segun Aina, Chair of Africa Fintech Network outlined the following dominant trends shaping the continent’s fintech landscape.
Fintech buying banks
Fintech startups are growing faster than banks and have a better reach. Well-funded fintech startups seeking to scale up their operations are now buying banks. The latest example of such a case is Branch International, a digital lending financial solutions provider through its local subsidiary Branch Kenya, which acquired a majority shareholding of Century Microfinance Bank (Century MFB) to roll out a digital bank. By acquiring banks, fintech startups seek to offer a much wider variety of financial services to their clients.
Fintech startups expanding beyond their countries
When fintech innovators are creating products, they are not looking at their countries alone but the whole of the African continent. Most African countries face the same challenges, and the new technologies can easily be replicated in other markets apart from their host countries. With enough funding, they have the capacity to venture into new markets. Some of the fintech that have recently expanded from their home countries to others include Tanzanian startup NALA which raised $10 million to expand to 12 African countries by the end of the year.
Telcos pivoting to fintech
Since the successful launch of the mobile money transfer service Mpesa by Kenyan telco Safaricom in 2007, telecommunication companies in Africa are aggressively pivoting to fintech. Last month, MTN Nigeria, the Nigerian subsidiary of Africa’s largest telecom MTN Africa, received final approval from the Central Bank of Nigeria (CBN) to operate a Mobile Money Payment Service Bank (MoMo PSB). Other mobile operators that operate digital banks in Africa include Vodafone and French telecommunications giant Orange.
Central banks going the CBDC way
A CBDC is the virtual format of a country or region’s base currency. As the world welcomes digital payment and cryptocurrencies and stablecoins become more popular, central banks around the world are contemplating adopting the technology. In Africa, Ghana, Morocco, Egypt, Kenya, and South Africa are exploring CBDC’s viability.
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!