Africa: Fintech revenues will grow 13-fold to $65 bln by 2030, report estimates

The expected boom in the African fintech industry will be fueled primarily by low banking rates, high population growth, and the high proportion of the young population on the continent. 

The combined revenue of African financial technology (fintech) startups is expected to grow 13-fold between 2021 and 2030, according to a report released on May 3 by Boston Consulting Group and QED Investors, a U.S.-based venture capital firm focused on investing in financial technology.

Entitled "Global Fintech 2023: Reimagining the Future of Finance," the report states that revenues from the startups revolutionizing African finance are expected to grow at an average annual rate of 32% by the end of the current decade, the highest growth rate in the world.

The expected boom in Africa's burgeoning fintech sector will be fueled primarily by low banking rates, the high proportion of young people in the general population, and the continent's projected demographic explosion. 

Fintech solutions can indeed help solve issues related to access to financial services in Africa,  where two-thirds of the population is unbanked or underbanked. 

The solutions may thus be most Africans' first interaction with the financial services sector. This is a major opportunity in the payment and lending segments for local fintech startups with comprehensive business models. Telecom financial service providers, like M-Pesa (Kenya), which have historically driven the industry boom on the continent, are likely to maintain their dominance.

On the other hand, Africa is the continent with the youngest population with median age being 19 years.  Its population is also expected to grow by an additional 1.2 billion people by 2050, which will increase the market for access to financial services.  

Given the size of their populations and their already developed ecosystems, South Africa, Nigeria, Egypt, and Kenya will be the main drivers of the fintech sector on the continent...Read more on Ecofin Agency

Source: Ecofin Agency