Statista estimates the number of adults with a bank account in Africa to grow from 298 million in 2017 to 456 million in 2022. While Africa’s FinTech scene has its early roots in mobile money, the market is now rapidly expanding to include a range of financial services. The tech solutions designed by companies in the Financial Services industry have over the years fostered increased access to online financial and banking services by making financial transactions cheaper and faster compared to the traditional services.

Also read: A Glimpse At Some of Africa's Neobanks and How Much They've Raised

For the last 3 years, the Financial Services landscape has attracted more funding in Africa compared to other tech sectors. Digest Africa data records over 165 startups in this sector offering payments, funds transfer, lending, and even wealth management solutions to users across the continent. In 2019 alone, African Fintech startups raised a combined $605.4M in funding across 109 deals. This is 43.2% of the $1.4 billion that has been raised overtime across 381 deals. However, while assessing the financial services startups that raised at least $1M venture capital in the same year, only 13 startups were co-founded by women. 

Nigeria, Kenya, and South Africa are home to a sizable number (116 startups out of 165) of Financial Service companies, making up over 70% of the figure. Their ability to attract funding is attributed to several factors including: improved business environments and external investment into the markets, significant economic growth among others. This has made them the most attractive economies and bred some of the most impactful companies in Africa. 

Interswitch, that reached unicorn status after Visa acquired a minority stake in the company, payments platform Flutterwave, Opera’s OPay, a mobile payment service, mobile health CarePay and mobile financial service Jumo are just some of the few companies based in these countries that have all secured $10M+ in total funding and account for some of the largest rounds on the continent. 

Majority startups in Africa have raised Seed ($185.7M across 156 rounds), Grants ($19.1M across 64 rounds) and Series A ($267M across 37 rounds.) The most active investors in this industry by number of rounds participated in are: Y Combinator (23 rounds), TechStars (13 rounds), 500 Startups (13 rounds), Startup Bootcamp(11 rounds), Visa (9 rounds) and Mictrotraction (9 rounds).

A recent report from MasterCard “Five Global Trends to Watch” predicted a favourable outcome for the financial services industry in Africa. This assumption is based on the increased use of mobile devices on the continent, a factor that is driving the population to use more online services thus fostering more innovations in the FinTech sector.

Before the outbreak of the pandemic, startups (within Financial Services and in various sectors) on the African continent were gaining momentum and growing steadily. Budding companies like OPay and PalmPay had made groundbreaking raises ($170M and $40M respectively) to further expansion into African markets. 


Unlike the adverse effects it has had on several sectors, COVID-19 has surprisingly contributed to the faster-growing pace of Fintech in Africa. Digital financial inclusion has taken root during the pandemic as a result of the desire to facilitate reduced physical contact and cash handling, a rule emphasized by many governments and offered by Fintech companies. 

Financial Services, especially through mobile money, has helped both individuals and companies to continue having access to their finances despite the lockdown. This has supported the reopening of businesses across the continent with the use of cashless transactions as a standard operating procedure (SOP) in compliance with the World Health Organization’s advocacy for social distancing. Governments all over Africa also encouraged several businesses to adopt digital technology so they can continue operating with reduced physical contact by offering incentives. An example of this was in Kenya where the use of mobile money services increased because the Kenyan government waived sending charges of up to 1000 shillings (about $9.3) to encourage cashless payments and curb the spread of the virus.

By making this possible, financial services have heavily supported governments’ initiatives to revive their economies by reducing the rate of physical contact.

In May 2019, the Institute of Chartered Accountants in England and Wales (ICAEW) published a report predicting the growth of the African Financial Technology sector to scale up to $3 billion in value by 2020 with key players in Kenya, Nigeria, and South Africa. The realization of this particular prediction is now questionable due to the undeniable effects that the COVID-19 pandemic has had on both investors and startups in various sectors. Firstly, here is a breakdown of funding received by the sector in 2020 so far.

Per Digest Africa data, the total amount of disclosed funding as of 12th December 2020 for Fintech is $251.5M across 83 rounds. Some of the major disclosed deals from 2020’s first quarter included large FinTech investments including South Africa’s Jumo and Nigeria’s Flutterwave as they both raised $55M and $35M respectively. The majority by stage raised Seed (49 startups) followed by 8 in Grants and 8 in Series A funding rounds. The most active investors so far are Y Combinator with 6 investments, ARM Investment Managers with 4 followed by HQ Financial Group and Antler with 2 investments each.

Currently, the major challenge being faced by all sectors in Africa is fundraising. Despite having more success over other sectors, Financial Services startups have seen a drop in foreign investment that has been crippled by the pandemic. According to Digest Africa’s data, the total number of investments received for the year 2019 was 140 with 109 being disclosed rounds. 9 days to the close of 2020 and the number of investments for the year has dropped to 109 rounds (with 83 disclosed rounds).

Aside from a drop in investments, other challenges faced by the sector include cyberattacks and fraud, power supply, limited access to customer data and little participation from local investors. These however are being countered with continued cyber security training programs offered by learning institutions, companies as well as Incubator and Accelerator programs, adoption of solar and clean forms of energy that are reliable and increased adoption of digital registration. 

 As the World gets acquainted with the ‘new normal’, financial services are still in a good position to continue benefiting from the current situation due to shifting a huge volume of financial transactions online. Digital payments are predicted to soar higher even after the COVID-19 pandemic as many would have adapted to the use of these services. 

Digest Africa


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