• juliegoldman


In recent months, there has been a lot of buzz and excitement over the promise of an African-focused financial technology sector. The year 2019 was record-breaking for African tech startups with 311 companies securing over $490 million worth of funding. In fact, over the past three years a significant amount of funding was raised where the number of investors in African tech startups jumped by 61% – there’s a major reason for why this is happening. So, what’s all the hype about?

Well the short answer is, we’ve seen a major shift in the region’s technological ecosystem and demographics. A previously under-the-radar financial app market has now caught the attention of major global investors. These existing players look to position themselves as the market is expected to grow exponentially over the next 5 years.

What’s the reason for the rapid growth of finance apps in Africa?

There is a myriad of factors and positive demographic changes that have formed the basis of the anticipated accelerated growth in the Fintech industry:

1. High demand for financial inclusion

The Fintech growth phenomenon can be partially explained by the fact that 66% of the adult population is unbanked in Africa, meaning there is a high demand for financial transactions like paying bills, take out loans, or send money exists without any access to the traditional banking system to do so. This emerging industry now has a massive opportunity to provide financial inclusion to those that wouldn’t normally have the option prior. To keep it simple, these Fintech companies have identified this and are focused on honing in mobile technology as a solution to the age-old problem. This helps explain the booming Fintech landscape in Africa and especially in Nigeria with the rise of over 210-250 Fintech companies.

2. A more tech savvy & young generation

The industry keeps on evolving due to technological advancements and demographic support as 50% of the population in Nigeria alone is expected to be less than 25 years old by the end of 2020. This indicates that there is now a new generation of young Africans that are willing to take part in this new growth frontier. With such a young labor force and a rapidly growing mobile adoption rate, it has ultimately paved the way for these Fintech services to flourish.

3. The rise of mobile-first adoption rates

At a time where technology is disrupting the financial industry globally, we are seeing that it is no different in African countries. As opposed to western countries, where there was a shift from Desktop usage to mobile, smartphones are now changing the game for financial mobile app growth. Nigeria for example is a mobile-first country with 172 million mobile subscribers, accounting for a penetration rate of 87% of the population. With the availability of affordable smartphones in the market, it explains the surge in mobile phone adoption rates. The increased mobile and internet penetration in Nigeria, brings even more opportunity for mobile-first Fintech to emerge and build competition as startups try to get a larger piece of the market share.

Why are Fintech apps catching interest of investors in Africa?

The high demand for financial app services has caught the attention of major Chinese & Silicon Valley investors. We can see this trend apparent in Nigerian and Kenyan based Fintech and mobile-first companies. Companies such as OPay, PalmPay, Carbon, Chipper Cash, Paga, Branch, Tala, and many others have recently raised notable funding and are in their growth phase in these markets. Some of these are backed by leading Chinese and UK investment groups.

Why are these Fintech apps in such high demand?

With the higher demand of financial inclusion, younger and tech savvy population, and increased smartphone penetration, it comes as so no surprise the popularity of these Fintech apps. Essentially, these products are plugging into the large gap that currently exists in the financial service industry and hence is in such high demand to the growing population. These products offer financial transactions outside of the traditional brick-and-mortar banking system such as payment, bills, instant loans, credit reporting, investments and money transfers .

What’s next for Fintech apps in Africa?

We have already established that Africa is the next best growth frontier for Fintech companies, especially with a population of 1.2B and the fastest-growing consumer market. With that in mind, we will continue to see an emergence of new startups in the Fintech space, as well as dedicated funds for entrepreneurs willing to build and invest in the region. We expect to see fierce competition between the existing players in the Fintech market and for international “giants” like Facebook and Google to increase their presence and potentially invest in new ventures throughout the continent.

The key takeaway here is that we know the Fintech industry in Africa will continue to grow over the next 5 years. It holds a lot of promise for app developers and mobile marketers to drive incremental growth for their app. This is an imperative time for marketers to start sharpening their mobile marketing strategies and become savvier with mobile measurement, media management and the available advertising solutions.

Contact us today if you want to hear more about our view on this exciting new market

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