Africa’s fintech sector is expanding rapidly with revenues projected to hit $230 billion by 2025 on rising mobile adoption, digital transformation and increasing financial inclusion, according to a new McKinsey report.
Despite macroeconomic challenges, the continent’s fintech ecosystem has demonstrated resilience and adaptability with funding for tech startups rising 18-fold over the past six years.
The report titled Redefining Success: A New Playbook for African Fintech Leaders highlights key growth drivers, including a digitally savvy population, declining data costs and regulatory advancements fostering innovation and expanding market penetration.
Africa’s leading fintech markets—Nigeria, Ghana, Egypt, and Kenya—have achieved market penetration rates of up to 13% with fintech revenues currently estimated at $3.8 billion, accounting for 2.5% of the continent’s $153 billion financial services market.
The report emphasizes a shift from hypergrowth to sustainable profitability, noting that fintech companies with comprehensive growth strategies were 97% more likely to achieve above-peer profitability.
With mobile internet penetration expected to increase from 300 million users in 2020 to nearly 475 million by 2025, Africa is entering a transformative phase for digital financial services. The expanding fintech landscape also presents an opportunity to address economic inclusion, as 57% of Africans remain unbanked.
The sector’s maturation is leading to increased mergers and acquisitions (M&A), enabling fintechs to scale from national leaders to regional powerhouses. The report projects financial services revenue to grow by 9% annually until 2025, solidifying fintech’s role as a key driver of Africa’s economic transformation.
“The fintech revolution in Africa is not just a trend; it’s a transformative force that is reshaping the continent’s financial landscape,” said Mayowa Kuyoro, Partner at McKinsey, Lagos, and author of the report.
“Despite the macroeconomic challenges, the resilience and adaptability of African fintechs are truly remarkable. With the right strategic focus and supportive regulatory environments, the fintech sector in Africa is poised to unlock immense value, driving sustainable growth and improving the lives of millions across the continent.”
With strong investor interest, increasing digital adoption, and regulatory backing, Africa’s fintech industry is well-positioned to become a critical pillar of economic development, bridging the financial inclusion gap and unlocking new opportunities for growth across the continent.
