How the fintech ecosytem is evolving to drive financial inclusion in Africa

The Fintech landscape in Africa is rapidly evolving, with startups attracting over 60% of all venture funding in the last quarter. As Africa embraces increasing cellular and internet penetration, the Fintech sector presents a unique opportunity to enhance financial inclusion across the continent. In a recent CNBC Africa interview, Bradley Wattrus, Co-founder & CFO of Yoco, and Lebogang Mokgaudi, Digital Financial Services Consultant at IFC, discussed the transformation and potential of Fintech in Africa. The discussion shed light on the current state of the Fintech ecosystem, the impact of COVID-19, the role of Fintechs in the AFCFTA, public-private partnerships, new business models, and cybersecurity in Fintech. The conversation also offered insights into the future of Fintech innovation in 2022 and beyond. Lebogang Mokgaudi highlighted the evolution of Fintech in Africa, emphasizing its shift from payment solutions towards credit, insurance, and embedded finance services. He noted the increasing importance of Fintech in facilitating B2B transactions and government services, citing examples of mobile payment solutions enabling tax payments and subsidies for smallholder farmers. Bradley Wattrus highlighted Yoco's focus on enabling small businesses to digitalize their payments and access financing, emphasizing the need to transition small and micro-enterprises to the digital economy. He also underlined the potential of technology to bridge geographical divides and promote cross-border trade within the AFCFTA. The interview touched upon the accelerated digital payments trend during the COVID-19 pandemic, emphasizing the key role of Fintechs in driving financial inclusion and enhancing trade across the continent. Lebogang Mokgaudi discussed the regulatory efforts to enhance data protection and cybersecurity in the Fintech sector, citing examples of laws in Kenya aimed at protecting consumers and small businesses accessing digital lending solutions. He also highlighted the rise of fraud protection measures and partnerships between Fintechs and security companies to mitigate risks associated with digital payments. Looking ahead to 2022 and beyond, both speakers predicted a surge in Fintech solutions catering to the gig economy, startup partnerships for market expansion, and Fintech innovations in agriculture and healthcare sectors. They also anticipated a consolidation of products and services in the Fintech space, emphasizing the importance of broader offerings and deeper customer relationships. The evolving Fintech ecosystem in Africa presents a promising outlook for enhancing financial inclusion, driving economic growth, and fostering innovation across the continent.