It is no longer news how fintech has dominated the African tech space and how impactful the sector has been as technology has helped reduce banking activities and costs for businesses and individuals. Gone are the days when there were debates about whether fintech would challenge traditional African banks. We have seen several companies in the fintech sector providing real value and being successful.
As it is with budding industries like the tech sector in Africa, the measure of success is usually with the attention of global players. Since 2019, the fintech industry has gotten more funding from international investors and more exits. Fintech has gotten more funding than any other sector in the African tech ecosystem since 2019. According to the media outlet Disrupt Africa, database WeeTeacker and Africa–focused fund Partech, fintech has been the most funded startup sector across Africa in 2019.
It has remained the same since then. After a brief dip during the COVID-19 pandemic of 2020, the deals came back with several foreign investors. It didn’t hit the $2B mark of 2019 per Partech, but there were some significant investments. Also, in 2020, there were a couple of acquisitions. Global cross-border payments company WorldRemit acquired an African-focused remittance app, while an American fintech company also acquired a Nigerian fintech company.
2021 was a record year for fintech investment in Africa, according to global advisory firm KPMG and the momentum is likely to increase this year.
So why has the fintech sector proliferated in Africa;