Africa’s fintech sector is growing at a fast pace, with the number of startups operating in the space growing by more than 60 per cent in the last two years, while funding has hit new records.
Disrupt Africa has released Finnovating for Africa 2019: Reimagining the African financial services landscape, which finds the number of active fintech ventures across the continent has grown to 491 from 301 in 2017.
South Africa, Nigeria and Kenya remain the main three markets, with 141, 101 and 78 active ventures respectively, accounting for 65.2 per cent of Africa’s fintech startups. Yet the share of the overall total claimed by these three countries is in decline as the sector spreads across the continent, with fintech startups tracked in 28 African nations.
Though the big three markets are growing, the biggest developments are occurring in other markets, with countries like Uganda, Ghana and Egypt in particular seeing their local fintech spaces explode.
A similar trend can be seen in terms of the type of platforms being rolled out by fintech entrepreneurs. Though startups in the payments and lending spaces remain the most prevalent, the fastest growth is occurring elsewhere, with the number of startups active in areas such as investtech and insurtech, for example, more than doubling in the last few years.
Meanwhile, there is a marked increase in the amount of companies focusing on two or more distinct types of financial services, as African fintechs begin to “rebundle” and we see moves towards fully-fledged, all-service digital banks on the continent. This is a process that is quickening as the amount of funding coming into the sector grows. African fintech companies have raised just shy of US$320 million in funding since January 2015, and last year’s total of US$132.8 million was the best year yet.
“The financial services landscape in Africa is following a very unique trajectory, as compared to other geographies. Most remarkable about this trajectory, is that is it being driven by entrepreneurs and their home-grown innovations. We hope this report affords our readers an interesting insight into the fintech revolution taking place across Africa” said Gabriella Mulligan, co-founder of Disrupt Africa.
“No space has quite the potential impact of the fintech space when it comes to impact – and profits – in Africa, with startups operating such platforms able to significantly address the major issue of financial exclusion on the continent and thus promote development in all sorts of other areas. It is exciting to see the speed at which the sector is developing, therefore, but also heartening to see the signs of maturation and consolidation that will ensure its ultimate success and longevity,” said Tom Jackson, co-founder of Disrupt Africa.
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