‘Fintech accounted for 27 percent of the record-high number of deals closed across Africa in 2021, found a Mastercard study of the sector.
Mastercard‘s white paper ‘The Future of Fintech: Rapid Growth Attracts Smart Capital‘ focuses on the fintech sector throughout Africa. The report details Africa’s success in the fintech industry and how the continent has put itself at the forefront of payment innovation.
South Africa, Nigeria, and Kenya are also leading the transition to digital payments. Infrastructure and policy frameworks are in place to enable the growth of fintech in Africa.
According to the report, the fintech sector made up 61 percent of the $2.7billion deployed across Africa in 2021. Large deals worth more than $100million each have characterized the industry in the region.
Nigeria emerged as a leading fintech hub across the Middle East, Africa, and Pakistan as startups there accounted for a third of all funding deployed into fintech in 2021. Within Nigeria, the fintech sector accounted for 71 percent of all venture capital.
Africa does not have pan-regional regulations like the US and European markets. Despite this, it is able to ease payment constraints. The ‘PanAfrican Payment and Settlement System’s development by the African Continental Free Trade Area makes it easier to navigate 50 countries and 40 currencies.
The growth in the number of fintech companies in Africa highlights the growth of global fintech funding. The funding jumped to a record high of $131.5billion in 2021. The number of fintech unicorns reached 235 with 34 alone born in Q4-2021. Fintech companies now represent more than 20 percent of total tech unicorn value. In the prior year, fintech firms represented only 15 percent of the unicorn value.