According to a recent McKinsey & Co. research, Africa’s fintech market to increase by 10% annually by 2025, with sales reaching $230 billion. According to the study Fintech in Africa: The end of the beginning: The estimate is based on the current rate of penetration across the continent. Payments and mobile wallets are among the items with the quickest growth, followed by account management, wealth management, and remittance services.
According to the McKinsey & Co. analysis, the predicted expansion of the African fintech sector won’t be consistent throughout the continent.
Other than South Africa, which now contributes 40% of the continent’s yearly income, Ghana and Francophone West Africa are anticipated to have 15% and 13% growth, respectively. Each country in the projection, Nigeria and Egypt, had 12% growth. The economies of Cameroon, Côte d’Ivoire, Egypt, Ghana, Kenya, Morocco, Nigeria, Senegal, South Africa, Tanzania, and Uganda account for 70% of Africa’s GDP. Nigeria and Egypt, both of which had 12% growth throughout the anticipated timeframe, would come in second and third, respectively.
90% of transactions in Africa still take place in cash. The real-time payment infrastructure required to scale up fintech businesses is only present in Egypt, Ghana, and Nigeria. According to McKinsey, from between $4.5 billion and $6 billion in 2020, fintech may bring in $30 billion in revenue by 2025. Flutterwave’s problems in Kenya and Ghana, as well as the severe scrutiny its leadership has received for several alleged violations, have been the focus thus far.
Nigeria, Kenya, South Africa, and Egypt are often the four nations where African fintech financing is concentrated. However, seven other markets—Cameroon, Côte d’Ivoire, Ghana, Morocco, Senegal, Tanzania, and Uganda—show significant room for fintech expansion.
Ghana’s fintech industry is predicted to develop at a 15% annual rate, although it is unclear how the country’s ongoing inflation issues would affect that projection. Fintech might expand at 13% in francophone west Africa, where mobile money company Wave became a unicorn last year, while McKinsey projects 12% growth in Nigeria and Egypt.