Africa-Centric Banking: Three Themes Driving African Fintech

Published 30 March 2023

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2 min read

Experts have pinpointed Africa as the most lucrative region for fintech and decentralised finance. In 2020, 75% of people using fintech solutions in north Africa and the Middle East said digitalisation had made banking easier (Statista, 2022). Stylus highlights three themes dominating the sector in Africa.

Banking the Unbanked: Cash is used for 90% of transactions across Africa, while the continent’s fintech companies see the highest adoption rates in the world (McKinsey, 2022). It’s predicted that 144 million north Africans will use digital payments by 2027 (Statista, 2023), making start-ups rush to get their cyber solutions to consumers. In March, the South African Reserve Bank launched its rapid payment platform, PayShap, which offers access to instant, real-time transactions, as well as the use of an alias number instead of a bank account number to make them safer.

Catering to African Diaspora: Tanzanian cross-border payments app Nala found that 8-9% of all money sent back to Africa is lost in processing fees, meaning the continent is the most expensive to transfer funds to. The start-up wants to make payments to the region easier for the diaspora in the UK, US and Europe by offering lower transaction rates. London start-up Zazuu also helps Africans in the UK with reduced conversion charges by offering a price comparison tool to choose the most appropriate money transfer firm.

Bridging the Digital Gender Gap: In Africa, men are more likely to go online, own a mobile phone or smartphone, and use social media. Fintech platforms are addressing this digital gender gap by providing services to African women. In Nigeria, cyber finance company Shecluded funds female entrepreneurs through growth loans, insurance, wealth management and financial education, while fintech start-up HerVest serves women in agriculture by offering investment tools, commercial insights and digital transactions.

Banking the Unbanked: Cash is used for 90% of transactions across Africa, while the continent’s fintech companies see the highest adoption rates in the world (McKinsey, 2022). It’s predicted that 144 million north Africans will use digital payments by 2027 (Statista, 2023), making start-ups rush to get their cyber solutions to consumers. In March, the South African Reserve Bank launched its rapid payment platform, PayShap, which offers access to instant, real-time transactions, as well as the use of an alias number instead of a bank account number to make them safer.

Catering to African Diaspora: Tanzanian cross-border payments app Nala found that 8-9% of all money sent back to Africa is lost in processing fees, meaning the continent is the most expensive to transfer funds to. The start-up wants to make payments to the region easier for the diaspora in the UK, US and Europe by offering lower transaction rates. London start-up Zazuu also helps Africans in the UK with reduced conversion charges by offering a price comparison tool to choose the most appropriate money transfer firm.

Bridging the Digital Gender Gap: In Africa, men are more likely to go online, own a mobile phone or smartphone, and use social media. Fintech platforms are addressing this digital gender gap by providing services to African women. In Nigeria, cyber finance company Shecluded funds female entrepreneurs through growth loans, insurance, wealth management and financial education, while fintech start-up HerVest serves women in agriculture by offering investment tools, commercial insights and digital transactions.