Africa retains the potential to surpass the leading fintech regions if startups on the continent embrace new technologies.
Based on a recent report, despite cash being predominant in Africa’s financial landscape, fintech startups are well-positioned to address the challenges of financial exclusion on the continent. By leveraging innovative technologies and digital solutions, these startups can bridge the gap and provide financial services to under-served populations who have limited access to traditional banking services.
As a result, the region can become one of the fastest-growing in the world thanks to its young population as well as the projected population growth of 1.2 billion more inhabitants by 2050.
As shown by the report’s data, revenue earned by African fintech startups is expected to grow 13 times and top $50 billion by 2030, the fastest rate by any region. Latin America has the second-highest projected growth with 12.5x, while Asia-Pacific is projected to become the largest fintech market by 2030.
Global Fintech Revenue Growth by Region: 2021 – 2050 pic.twitter.com/9gI9TKBLxU
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The report identifies Nigeria as Africa’s most populous nation as an example of a country with a demographic profile that makes it an ideal candidate to drive the fintech market in Africa.
“Accordingly, most Africans’ first interaction with the financial services sector may be through their smartphones—presenting major fintech opportunities in payments and lending for regional champions with full-stack attacker models,” the report explained.
The report, however, acknowledges that telco fintech players have dominated the African fintech market adding that these will likely retain their dominance even as more fintech startups switch to new technologies.
“We project a fintech revenue CAGR (Compound annual growth rate) of 32% until 2030, with South Africa, Nigeria, Egypt, and Kenya being the key markets,” the report said.
“By 2030, global banking and insurance revenue pools are expected to reach $21.9 trillion, a 6% compound annual growth rate (CAGR). Payments and deposits are expected to be the fastest-growing segments, with APAC and Latin America seeing the most expansion.”
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