$144 Billion value to Sub Saharan Africa – Mobiles lead Fintech for Good

If you joined the Fintech party only this year, and feel you missed on riding the curve – don’t worry. Sub Saharan Africa is where all the Fintech excitement is at the moment. In 2018, Fintech investments in Africa quadrupled to $357 Million.

Africa In Our Hands

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This is tiny compared to the Billions being invested in China, the UK, the US or India. Yet, Africa is perhaps where #FintechForGood is happening at scale. When we think of Africa Fintech, we have three key economies,

  • Kenya – where MPesa had massive success
  • Nigeria – the largest African economy and one of the top Fintech hubs
  • South Africa – that’s great for Fintech, but still suffers from Legacy

However, there are interesting activities happening across other African economies too.

  • Ethiopia – their financial inclusion strategy has been attracting investment into mobile money services.
  • Angola – national bank is working on new laws for governing payment systems – due to be approved by the parliament this year.
  • Nigeria – regulatory reforms introduced last year allow mobile operators to operate as payment service banks (PSBs).

The GSMA recently launched a report on the Mobile Economy in Sub-Saharan Africa. The report offers some key stats, that could be seen as the foundation on which Fintech could happen at scale in Africa.

  • In 2018, mobile technologies generated 8.6% of GDP ($144 Billion) in Sub-Saharan Africa
  • Mobile ecosystem created 3.5 Million jobs in the region
  • A tax contribution of $15.6 Billion resulted from this value creation
  • By Q4 2018, there were 395.7 million registered mobile money accounts in the region.

The picture below identified some of the emerging startups in Africa across Fintech clusters.

Africa Emerging Fintech Landscape

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Mobile penetration is definitely creating opportunities for Fintech. Several international investment houses and tech giants are now looking at Africa as a market they need to be expanding into.

Omidyar Network has established a Fintech focused fund called Flourish. One of the big focus areas for the fund is financial inclusion. Speaking at a conference in Africa, Ameya Upadhyay of Flourish, described how commerce could follow conversation – Stressing the importance of the mobile penetration to lead the way for more Financial inclusion in the region.

In April 2019, Google set up their first AI labs in Accra, Ghana. They had previously supported machine learning programmes at the African Institute for Mathematical Sciences centre in Rwanda. In May 2019, Microsoft launched its Africa Development Centre (ADC) at Nairobi and Lagos. So, the tech giants are also gearing up to make the most of the development in the region.

However, my favourite development will be when some of the sustainable innovation ideas go mainstream. Africa is a great place to test, refine and scale ideas like, micro-loans for farmers, land registry on Blockchain, food supply chain on Blockchain etc., The UN Food programme is also contributing to some of these initiatives.

I am excited with the report and the statistics coming out of Africa. One can sense that the basics are finally there, and it is now all about making the most of it. The seed is sown, let us hope to reap the benefits and be fortunate to see Impact at scale.


Arunkumar Krishnakumar is a Venture Capital investor at Green Shores Capital focusing on Inclusion and a podcast host.

I have no positions or commercial relationships with the companies or people mentioned. I am not receiving compensation for this post.

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