Finance

Africa: Fintech revenues will grow 13-fold to $65 bln by 2030, report estimates

Africa: Fintech revenues will grow 13-fold to $65 bln by 2030, report estimates
Wednesday, 17 May 2023 15:39

The expected boom in the African fintech industry will be fueled primarily by low banking rates, high population growth, and the high proportion of the young population on the continent. 

The combined revenue of African financial technology (fintech) startups is expected to grow 13-fold between 2021 and 2030, according to a report released on May 3 by Boston Consulting Group and QED Investors, a U.S.-based venture capital firm focused on investing in financial technology.

Entitled "Global Fintech 2023: Reimagining the Future of Finance," the report states that revenues from the startups revolutionizing African finance are expected to grow at an average annual rate of 32% by the end of the current decade, the highest growth rate in the world.

The expected boom in Africa's burgeoning fintech sector will be fueled primarily by low banking rates, the high proportion of young people in the general population, and the continent's projected demographic explosion. 

Fintech solutions can indeed help solve issues related to access to financial services in Africa,  where two-thirds of the population is unbanked or underbanked. 

The solutions may thus be most Africans' first interaction with the financial services sector. This is a major opportunity in the payment and lending segments for local fintech startups with comprehensive business models. Telecom financial service providers, like M-Pesa (Kenya), which have historically driven the industry boom on the continent, are likely to maintain their dominance.

On the other hand, Africa is the continent with the youngest population with median age being 19 years.  Its population is also expected to grow by an additional 1.2 billion people by 2050, which will increase the market for access to financial services.  

Given the size of their populations and their already developed ecosystems, South Africa, Nigeria, Egypt, and Kenya will be the main drivers of the fintech sector on the continent.

Strong industry fundamentals

Globally, fintech revenues are expected to reach $1.5 trillion by 2030, roughly six times the $245 billion in 2021. Asia-Pacific is expected to overtake North America as the world's largest fintech revenue region by the end of this decade ($600 billion in 2030), thanks in part to the rapid development of the sector in China, India, and Southeast Asian countries. It will be followed by North America ($520 billion in revenues in 2030), Europe ($190 billion), Latin America ($125 billion), and Africa ($65 billion).

The report further highlights that 2021 was a record year for the fintech industry. That year, “fintechs represented roughly 9% of all financial services valuations globally, with public valuations reaching $1.3 trillion.” 

Two mega-fintechs, PayPal and Ant Group (formerly Ant Financial), also made it to the top 10 largest financial services firms in the world by market capitalization.

Since April 2022, however, fintechs have lost more than 60% of their market value, a drop that Boston Consulting Group and QED Investors consider a "short-term correction within a positive long-term trajectory" as the sector's fundamentals remain strong, particularly in emerging markets. More than 1.5 billion adults worldwide remain unbanked, with an additional 2.8 billion underbanked (defined as not having a credit card according to World Bank criteria). In addition, nearly 44% of the global adult population still relies heavily on cash for important transactions. 

At the same time, 89% of people over the age of 18 use cell phones as technological advances continue to generate new use cases by leaps and bounds.

On the same topic
• Bassirou Diomaye Faye denounces credit rating agencies’ methodologies as ill-suited to African contexts.• Senegal urges reforms to enable fairer...
(AfDB)-The Board of Directors of the African Development Bank Group has approved a $474.6 million loan for South Africa's Infrastructure Governance...
New card enables African payments without using US or European networks Aims to lower costs, protect financial data, and boost intra-African...
• Burkina Faso-based financial group, Vista Group Holding, has acquired a majority stake in Société Générale Burkina Faso (SGBF).•The move is part of...
Most Read
01

Lebara Group is now bringing its affordable and reliable mobile services to Africa, starting with Ni...

Telecoms: Lebara Enters Nigerian Market with Strong Competitive Ambitions
02

• Maritime sector faces renewed risks amid military tensions in the Middle East• Blockade fears at S...

Israel-Iran conflict raises new threats for global shipping and oil trade
03

• Gates Foundation commits $1.6 billion over five years to Gavi.• Bill Gates warns of rising ch...

Gates Foundation Pledges $1.6 Billion to Gavi to Boost Global Child Vaccination
04

In a West African financial landscape marked by tighter regulation of the fintech sector, digital fi...

In Five Years, Francophone Africa Will be A Major Force in African Tech –Régis Bamba
05

Transport and food prices have been climbing steadily across Africa in recent years. In Côte d’Ivoir...

Côte d’Ivoire’s Fuel Price Cuts Haven’t Slashed Transport Costs–Yet
Enter your email to receive our newsletter

Ecofin Agency provides daily coverage of nine key African economic sectors: public management, finance, telecoms, agribusiness, mining, energy, transport, communication, and education.
It also designs and manages specialized media, both online and print, for African institutions and publishers.

SALES & ADVERTISING

Benjamin FLAUX
bf@agenceecofin.com 
Téls: +41 22 301 96 11 
Mob: +41 78 699 13 72
Média kit : Download

EDITORIAL
redaction@agenceecofin.com

More information
Team
Publisher

ECOFIN AGENCY

Mediamania Sarl
Rue du Léman, 6
1201 Geneva
Switzerland

 

Ecofin Agency is a sector-focused economic news agency, founded in December 2010. Its web platform was launched in June 2011. ©Mediamania.

 
 

Please publish modules in offcanvas position.