African fintech startups continue to be an example to similar entities in other sectors, attracting substantial investment while disrupting the financial services market on the continent.
The innovative solutions that fintech enterprises are producing have attracted the attention of banks and investors, in the hope that these financial disruptors become the next PayPal or similar concept in Africa.
The last two years have seen a sharp increase in the number of businesses created in this sector, with 301 African fintech startups identified across 20 countries on the continent, data compiled by Disrupt Africa revealed.
The sector-specific report entitled ‘Finnovating for Africa: Exploring the African Fintech Ecosystem Report 2017’, closely analyzed the hundreds of fintech companies now operating in this space, establishing that an estimated $92,679,000 in investment was attracted by these fintech players in the African market in the last two years.
Africa’s fintech sector has experienced a significant boost in recent years, with aspiring entrepreneurs seeking to establish an early foothold in the market while finding solutions to African financial challenges.
The World Bank recently launched a pan-African post-acceleration program called XL Africa that focuses support towards digital startups across the continent, while numerous other accelerator programs have launched with the aim of backing fintech and other tech-related African startups, according to ITWebAfrica.
Opportunities for fintech enterprises in Africa are many, as around 80 percent of the African population remain unbanked and up to 90 percent of transactions still involve cash, according to BankingTech.
Fintech startups are thriving throughout Africa, but North Africa is playing catch up with the other regions at the moment, with South Africa, Nigeria and Kenya keeping pace as the top three nations for fintech startup activity.
Of the nine fintech categories featured in the Disrupt Africa report, startups dealing with payments and remittances dominate the market, with 41.5 percent of all startups focused on this space, while lending and financing also attract Africa’s fintech innovators.
“With so many of Africa’s citizens still without access to basic financial services, the work being done by the continent’s fintech innovators is of crucial importance and impact,” said Gabriella Mulligan, co-founder of Disrupt Africa.
“We’re glad to report such thriving activity among Africa’s fintech community, and believe these local entrepreneurs are creating a new model for financial services – and financial inclusion – in Africa,” she added.
