A report by McKinsey and Company, a global management consulting firm, has projected that Africa’s Fintech revenue could hit $30 billion by 2025.
Analysts at the company predict that African Fintech companies could see their revenue jump to about $230 billion by 2025. Regarded as one of the fastest growing industries in Africa, with five out of the seven unicorns on the continent being fintech companies, the Fintech industry is reported to have a significant impact on the day-to-day life on the continent.
The significant growth of companies in the industry is reportedly fueled by several trends such as affordable internet, increasing smartphone ownership, fast-growing rapidly urbanizing population, and expanded network coverage.
In 2020, the industry generated approximately $3.8 billion, in 2021 it raised over $13 billion. The sector secured $1.45 billion in funding for 2022, a 39.3 percent increase from the previous year.
In a bid to achieve sustainable growth, analysts at McKinsey & Company say companies that have a long history of operating on the African continent have built their success on rapid customer acquisition. The company further disclosed that the growth opportunity in fintech is likely to be concentrated in 11 key markets such as Kenya, Ghana, Nigeria, Tanzania, Egypt, Cameroon, Côte d’Ivoire, Morocco, Senegal, South Africa, and Uganda, which altogether account for 70% of Africa’s GDP and half of its population.
It is believed that the COVID-19 pandemic accelerated existing trends toward digitalization and created a fertile environment for new technology players, even as it caused significant hardship and disrupted lives and livelihoods across the continent. With the industry’s upward trend, analysts predict that it can be perfectly poised to rapidly advance Africa’s global competitiveness with an increase in the exporting of Fintech services globally.
According to the analysis, economies with more mature financial systems and digital infrastructures, such as South Africa and Nigeria, are likely to see more innovation in advanced financial services, including business-to-business (B2B) liquidity and regulatory technology such as anti-money laundering and know-your-customer (KYC) compliance.
Investors King understands that Africa’s Fintech industry will continue on an upward trajectory, owing to the fact that a sizable part of Africans are still unbanked, and numerous fintech are working to address this issue and access the market.
