Tuesday, November 05, 2019 / 09:04 AM / By EY / Header Image Credit: EY
FinTechs in Europe, North America and Asia have caught the attention of many financial institutions and investors in recent years: the trends and effects of FinTechs in these markets have consequently been thoroughly analyzed. This report aims to shed light on a market that exhibits tremendous potential for FinTech investments, but which has not yet attracted the same level of attention from international investors.
Sub-Saharan Africa (SSA) is a region of opportunity for FinTech investments due to its unique economic and demographic environment. The region is characterized by less-developed financial infrastructure, and an unbanked population of about 60%. By ensuring access to financial services to this population, FinTechs have the potential to profoundly change the financial services landscape and play a pivotal role in improving financial inclusion.
The continent has already proven its readiness for FinTechs: it has one of the highest mobile phone penetration levels in the world, and is currently experiencing a boom in mobile financial services and payment technologies. Currently, the FinTech revolution in Africa is primarily fueled by the continent's three main hubs of South Africa, Kenya and Nigeria. These areas boast relatively more advanced FinTech ecosystems compared to the rest of the continent.
With local and global players, the FinTech landscape has grown at an annual rate of approximately 24% over the last 10 years. As observed in the FinTech sectors of developed countries, the landscape is currently ripe for consolidation. There are specialized players in the market and their complimentary business models make them attractive targets for mergers and acquisitions.
Both private and public investors worldwide have started to pay more attention to these developments, evidenced by a steady increase in investments in the SSA FinTech market.
Overall, the sector exhibits promising signs of accelerating growth, ample investment and business opportunities.