Fintech, or non-banking financial services that use technology, is a relatively new term worldwide. However, the scope of its services, their growth rates, and the value of overall transactions globally are breathtaking.
Africa has its fair share of potential and opportunities in the sector. The number of fintech companies in Africa almost tripled in 2024 compared with 2020, and African fintech startups attracted $1 billion of investments last year, equivalent to almost half the investments pumped in by venture capital companies to startups in all sectors on the continent.
More important is the fact that five out of Africa’s nine unicorns, companies valued at over $1 billion, are fintech firms, proof of the sector’s importance and growing potential.
Speakers at the sessions, trainers in the workshops, and startups displaying their products in the halls of GITEX Africa 2025, hosted in the Moroccan city of Marrakesh last week, agreed that there is great potential for the business in Africa, where 57 per cent of the population do not have access to banks.
Fintech offers segments like micro, small, and medium-sized enterprises (MSMEs) alternative channels for getting loans, making payments, and taking out insurance products. Traditional banking infrastructure has failed to reach millions, especially in rural areas, leaving a vast gap in financial access.
“We [fintechs] provide our customers, whether small businesses or consumers, with access to speed and convenience,” said Mounir Nakhla, co-founder and CEO of MNT-Halan, Egypt’s first fintech unicorn in one of the sessions.
He explained that while the banks in some African countries make their money out of investing in treasury bills and money from deposits, which he called an “easy” business model, fintechs “dig deeper to find opportunities and take larger risks with lower transaction costs.”
Even before he started MNT-Halan, Nakhla had founded two fintechs to serve the unbanked. The first was Mashroey, which helped Egyptian young people to acquire three-wheel Tuk Tuks, a main transport method in rural areas, and the second was Tasaheel, which targets Egyptian women to finance their micro-scale projects.
Godfrey Sullivan, Visa’s head of products and solutions for Central Europe, the Middle East and Africa, said that in many African countries there is a lot of cash usage, and “as people are looking for mobile money and real-time payments platforms,” fintechs can fill an important gap.
Mobile technology enables customers to manage transactions in an account linked to their mobile device. This lays the foundation for unbanked consumers to enter the formal financial services economy and is one of the most important forms of fintechs on the continent, according to speakers at the conference.
Capitalising on the high growth rate of fintechs, Visa started an Africa Fintech Accelerator in 2023 that empowers fintech startups through a 12-week curriculum that includes training, mentorship, and networking and exclusive opportunities for funding and partnership, aligning with its commitment to invest $1 billion in Africa by 2027.
“What we are looking for are fintechs that are solving real-world payment-related problems,” Sullivan said.
Balad is a fintech company that has sought to solve a problem in Egypt. Co-founded in 2022 by Adham Azzam, it is a remittance-driven financial service provider (RemTech) catering for migrants and their families. It offers reduced transfer fees and the instant delivery of inward remittances.
Azzam told Al-Ahram Weekly that he had discovered that many expatriates have problems sending money to their families back home in Egypt. He explained that money transfer fintechs must be linked with one of the local banks, but as these companies are usually small-sized and their transaction value is limited, the banks may be unwilling to make efforts to help when transactions are small, leading to delays.
“What Balad does is aggregate the transactions of several fintechs under one umbrella, so the bank deals with substantial flows through one fintech. This makes life easier and less costly for the expats and their families,” Azzam said.
It took him two years to get things moving on his idea, including acquiring a licence, tapping investors, and building a team. For fintechs to succeed, they should be well-regulated by central banks and other financial authorities, he commented.
Elma Ribica, co-founder and managing partner of First Circle Capital, a venture capital company that was one of the investors in Balad, said that “we have been investing in Egypt, and what we have observed is the real proactive role of the regulator in driving and mandating the banks to partner with fintechs and their willingness to support the sector.”
However, Nakhla pointed out that the existence of a reliable digital infrastructure is sometimes not less important than securing a licence from the regulator. “To start a fintech, an entrepreneur needs to have a digital identity, a digital contract approved by the courts, and a digitised system to file a case and implement a court decision,” he added.
Once the infrastructure is in place together with electronic “know your customer” (eKYC) solutions, the transactions become easier, Nakhla noted. eKYC is a digital evolution of identity verification by using tools such as optical character recognition (OCR) to extract data from documents and facial recognition to verify identities against ID photographs.
Startups speaking to the Weekly at GITEX said they had had problems in team building. “We have a lot of fresh graduates in technology and finance from private universities, but what we lack in Egypt, and I believe in Africa, is the mid-managerial level, as most of the experienced African managers leave due to limited resources,” said Mohamed Al-Meligy, founder of Sahl, an Egyptian application to pay different service bills.
Most African fintechs are growing in the most developed African countries, among them Nigeria, Egypt, and Kenya.
The number of tech startups in Nigeria was estimated to have exceeded 3,360 in 2024, the highest number in Africa. Egypt and Kenya counted approximately 2,112 and 1,000 startups in the same year, respectively.
According to Sullivan, Nigeria has been trailblazing fintech companies, attracts a substantial percentage of investments to Africa, and is the home of the largest number of unicorns.
“There is an enormous opportunity in Nigeria, with 37 million small businesses that are still not sufficiently financed, so we are heavily investing in it,” he commented.
Oluseun Olufemi-White, CEO of Alami Capital, attributed the Nigerian fintechs’ fast growth rate to the country’s innovative culture. She expects even faster growth soon on the back of a new initiative by the government.
“We expect that the next wave of innovation in Nigeria will be driven by local venture capital — localised context, localised collaboration, and localised capital,” she said.
This leap of faith has been taken by the Nigerian administration in collaboration with the private sector and means that the country would finance its fintech companies in different stages.
The idea of depending on local capital to fund startups was welcomed at GITEX. Sullivan explained that it would be a good idea in some countries where there is uncertainty about the local currency, as is the case with Nigeria’s Naira.
It could also help in countries with stringent controls on the entrance and exit of foreign capital or with lengthy procedures to give licences to foreigners.
The case of Morocco, which by hosting GITEX should be proof of a lively fintech scene, attracted attention, as the figures show that the country attracts less than it should in the fintech sector.
Speakers agreed that the problem lies in the fact that mobile money is not available in Morocco.
A lack of awareness and sticking to cash are stopping the use of electronic payments, and the laws surrounding digital currencies are unclear. The country has launched an initiative called “Maroc Digital 2025” to encourage the use of digital payments, and it aims to strengthen the financial infrastructure by working with private companies.
The effect of global economic developments on the fintech scene in Africa is hard to ignore. Nakhla pointed out that the world has changed from a pre-low-interest rates to a post-low-interest rates investment environment.
He said he believes the reason why Nigeria is looking for more local funding and Morocco cannot find it is that money has become more expensive. There are a lot of opportunities internationally, he said, so investors have become more picky.
Investors are also uncertain about countries whose currencies are not stable. Unless a company can survive a devaluation in the local currency and make profits in dollar terms, it is unlikely to attract investors.
* A version of this article appears in print in the 24 April, 2025 edition of Al-Ahram Weekly
Short link: