Only 15% of Africa’s 1.4 Billion People Use FinTechs; What Does it Mean?

The fintech sector in Africa is witnessing a surge of innovation and adoption of digital financial solutions.

However, the reach and impact of these solutions are still limited by various factors.

Many Africans are still left out of the fintech ecosystem and do not enjoy the benefits of digital financial inclusion.

This was the main theme of a recent event in Nairobi, where fintechs from the continent shared their experiences and challenges.

FinTech Regulatory Haddles

Ali Kasim Hassan, AFN VP-EA and Chairman of the AFIK board and speaker at the event, highlighted some of the key issues that need to be addressed.

He said that financial services is one of the most regulated industries in the world, and rightly so.

However, regulation can also hinder innovation and competition if it does not keep pace with the changing needs and realities of the market.

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For example, some African countries have strict licensing requirements or capital adequacy ratios that make it hard for fintechs to operate or expand.

“There is a need for more dialogue and collaboration between regulators and fintechs to create an enabling environment that fosters innovation while protecting consumers and ensuring financial stability,” said Hassan.

Some regulators may lack the capacity or willingness to understand and support new business models or technologies that challenge the status quo.

He called for more dialogue and collaboration between regulators and fintechs to create an enabling environment that fosters innovation while protecting consumers and ensuring financial stability.

One of the success stories of African fintech is M-Pesa, a mobile money service by Safaricom.

M-Pesa has expanded to several countries, including Kenya, Tanzania, South Africa, Afghanistan, Lesotho, DRC, Ghana, Mozambique, Egypt and Ethiopia.

It has over 50 million active customers who use it for various transactions.

Other Major FinTechs in Africa

Only 15% of payments across the continent are digital, leaving a large portion of transactions in cash or informal channels.

This means that millions of Africans are still excluded from the fintech ecosystem and miss out on the benefits of digital financial inclusion.