Africa will likely leapfrog the top fintech regions if startups on the continent adopt new technologies, the Global Fintech 2023 report by the Boston Consulting Group and QED Investors has said. The report points to the African continent’s young population as well as the projected population growth of 1.2 billion more inhabitants by 2050.
Overcoming Africa’s Financial Exclusion Woes
According to the Global Fintech 2023 report by the Boston Consulting Group and QED Investors, Africa and the Middle East are likely to leapfrog established fintech centers if they adopt new technologies. The report also noted that while cash is “still king” in Africa, fintech startups are ideally positioned to solve the continent’s financial exclusion woes. By overcoming this, the fintechs will help make Africa one of the fastest-growing regions globally.
On how Africa is likely to achieve this feat, the report pointed to the continent’s projected population growth of 1.2 billion more inhabitants by 2050. The report also cited Africa’s position as the continent with the youngest population globally. Nigeria, Africa’s most populous nation, is identified in the report as one example of the countries on the continent whose demographic profile makes it an ideal candidate to propel the fintech market in Africa.
Smartphones Present Major Fintech Opportunities in Lending and Payments
In terms of the technology that is likely to anchor the continent’s expected growth, the report said smartphones — which are already the primary way African residents access financial services — bring significant fintech opportunities.
“Accordingly, most Africans’ first interaction with the financial services sector may be through their smartphones—presenting major fintech opportunities in payments and lending for regional champions with full-stack attacker models,” the report explained.
The report, however, acknowledged that telco fintech players have dominated the African fintech market. It added that these will likely retain their dominance even as more fintech startups switch to new technologies.
As shown by the report’s data, revenue earned by African fintech startups is expected to grow 13 times and top $50 billion by 2030, the fastest rate by any region. Latin America has the second-highest projected growth with 12.5x, while Asia-Pacific is projected to become the largest fintech market by 2030.
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