Unpacking Africa's fintech growth

Africa's financial technology (fintech) industry has seen unprecedented growth in recent years, with funding for African fintech companies reaching a record $3.5 billion in 2021. This surge is being driven by a convergence of factors, including increased mobile phone penetration, a burgeoning young population, and a pressing need for financial inclusion. Djiba Diallo, the Senior Fintech Advisor at Ecobank Transnational Inc, highlighted the pivotal role of fintech in addressing the low levels of financial inclusion across Africa, particularly in sub-Saharan regions where less than 25% of the population has a bank account. In some areas, this figure drops to as low as 10-15%, underscoring the vast untapped potential for fintech companies to cater to the unbanked population. Diallo emphasized that fintechs are well-positioned to innovate and create tailor-made financial services to bridge this gap. Leveraging the continent's enthusiastic adoption of mobile technology, fintech firms are capitalizing on the widespread use of mobile phones to offer innovative financial solutions to a broader audience. The rise of mobile money services, exemplified by the success of M-Pesa in Kenya, has further catalyzed the fintech revolution in Africa by simplifying transactions and facilitating greater financial access. EcoBank, recognizing the transformative power of fintech, initiated the EcoBank Fintech Challenge in 2017 as a strategic move to partner with promising fintech start-ups, fostering collaboration and driving innovation in the industry.