That tech is the vogue in Nigeria is really no news but you probably did not fathom just how much of that growth is down to fintech or finance based technology start-ups. According to Quartz, fintechs have attracted more investments than any single sector in tech across Africa. Specifically, fintech has attracted three times more than any other group in the past three years.
The percentage of Africans without access to banking services stands at 66% which presents huge latitude for growth in this sector for most who start out. Obviously, there is a practical problem that these companies are solving but even at that, the growth has been phenomenal for where Africa is in infrastructural development.
In West Africa alone, fintechs have 13 times the reach of actual banks across the sub-region. That is not even as good as in East Africa where Safaricom’s M-Pesa has been responsible for elevating financial inclusion in Kenya from 27% in 2006 to a whopping 83% in 2019. The success of the big players like M-Pesa, MoMo and Interswitch has paved the way for smaller and more mobile fintech start-ups to come into space from the game-changing Flutterwave to intrepid start-ups like ChipperCash to further innovate and out-innovate their older.
Everyone in fintech is raising venture capital and VC firms are only too happy to give it. We will be remiss to say that other sectors are not growing but the growth in fintech is, in fact, a good thing for the rest of the industry. As the proverbial low-hanging fruit, it could be the plug the rest of the industry leverages to grow their fortunes. Founders in successful fintech start-ups have now become angel investors utilizing other sectors to grow their equity as well as that of their start-ups.