While African fintech start-ups continue to attract a significant share of funding compared to other sectors, they still encounter major hurdles that curtail their growth which reduces their impact on the continent.
During the African Fintech Summit, Munyi Ntigah, Secretary, Association of Fintechs in Kenya highlighted some of the prevalent challenges facing the African fintech landscape. They include the following:
- Limited local capital funding: While funding for capital is no longer a major issue but local sources for investment are still very rare and low.
- Growing and retaining talent within the fintech space continues to serve as a major concern as the human capital flight is gradually taking over the entire technology-enabled ecosystem in Africa. Munyi advises companies to look for more innovative ways of finding and retaining talent.
- There is still the need for more understanding of the fintech ecosystem by policymakers and regulators. Technology continues to outpace regulations while the latter plays catch up.
- Cyberthreats and attacks are prevalent and most fintechs’ digital infrastructure in Africa are not cyber-resilient.
- There are still gaps in digital financial literacy by consumers who are mostly in rural communities and largely not adequately educated.