Clearly, Africa has a future ahead of it that will transform the continent into the next economic and technological hub on the planet.
A new report that examines the state of fintech industries in Africa, points out that by 2025, revenues could reach eight times the current value.
The report published by McKinsey states that the financial services market in Africa could grow by around 10 per cent per year, reaching around US$230 billion in revenue by 2025 (US$150 billion excluding South Africa which is the continent’s largest and most mature market) .
According to the report, the success of fintech companies in Africa is driven by several trends, including increasing smartphone ownership, decreasing internet costs, expanding network coverage and a young, rapidly growing and growing population. in rapid urbanization.
The report further noted that the COVID-19 pandemic has accelerated existing trends toward digitization and created a fertile environment for new technology players, even as it has caused significant hardship and disrupted lives and livelihoods across the continent.
The report states that:
“Our analysis shows that fintechs are delivering significant value to their customers.”
“Its transactional solutions can be up to 80 per cent cheaper and interest savings up to three times higher than those provided by traditional players.”
“On the other hand, the cost of remittances can be higher and up to six times cheaper.”
“Together with an influx of funding and increasingly favorable regulatory frameworks, these factors could mean that African fintech markets are in great shape.”
“These data point to the beginning of a period of exponential growth if, as expected, they follow the trajectory of more mature markets, such as Vietnam, Indonesia and India”.
The future
In emerging markets, the report noted that Ghana and French-speaking West Africa are expected to experience the fastest growth, at 15 per cent and 13 per cent per year, respectively, through 2025. Nigeria and Egypt follow, each with an expected growth rate of 12 per cent per year over the same period.
The report concludes that fintech growth opportunity is likely to be concentrated in 11 key markets: Cameroon, Ivory Coast, Egypt, Ghana, Kenya, Morocco, Nigeria, Senegal, South Africa, Tanzania and Uganda, which together account for 70 per cent of Africa’s GDP and half of its population.
Conclusion
Africa is clearly becoming a major technological player to be considered in international markets. The exponential growth of African Fintech not only proves this but also points the way forward.
Clearly, Africa has a future ahead of it that will transform the continent into the next economic and technological hub on the planet.
