Fintech in Africa: a market full of potential
The McKinsey report, Redefining Success: A New Playbook for African Fintech Leadersforecasts an explosion in fintech revenues in Africa, rising from $10 billion in 2023 to $47 billion in 2028. This progression is based on two main drivers: the continent’s strong demographic growth and the accelerated adoption of digital services, such as mobile money, whose penetration could reach 49% by 2030.
Yet, according to McKinsey, fintech penetration in Africa remains low, at just 5–6%, compared to 15% in continental leader Kenya and 16% in advanced economies like the United States. The delay highlights immense potential for SME lending, cross-border payments and embedded finance, segments that are already attracting investor attention.
Despite economic challenges such as inflation or currency volatility, the sector remains resilient. Between 2018 and 2023, it recorded an average annual growth of 8%, and McKinsey predicts that this dynamic could reach almost 10% per year by 2028. The sector is moving towards a more sustainable approach, focused on profitability and operational efficiency.
Changing investments and persistent challenges
Investments in African fintechs are undergoing rapid transformation. Between 2022 and 2023, equity financing fell by 37%, while debt financing jumped by 182%. This shift, according to McKinsey, reflects a growing investor preference for more mature and better structured companies. This trend has also spurred mergers and acquisitions, strengthening existing players to better face an increasingly competitive market.
However, obstacles remain. Regulatory fragmentation complicates cross-border expansion, and global competition for technical talent remains intense. Nearly 38% of African developers today work for companies based outside the continent.
Despite this, innovation continues to flourish. Generative artificial intelligence (gen AI) stands out as a key lever to improve fraud prevention, personalize the customer experience and optimize operational efficiency. For many fintech executives, this technology could play a central role in future growth.
Partnerships: a key to financial inclusion
Collaborations between fintechs, banks and telecom operators are reshaping the African financial landscape. According to McKinsey, these partnerships are essential to expanding access to financial services. In Kenya and Nigeria, they have enabled the development of solutions such as cross-border payments and loans to SMEs.
Emerging economies, such as Angola and the Democratic Republic of Congo, are also showing encouraging signs. Regulatory and infrastructure improvements support their growth potential. The verticalization strategy, where fintechs focus on local markets rather than rapid expansion, is effective for sustainable growth according to McKinsey.
Mergers and acquisitions also help strengthen the sector. By combining complementary startups, investors create stronger players capable of meeting the expectations of a more selective financing environment.
Blockchain: a revolution in progress for African fintech
While global blockchain fundraising fell by 64% in 2023, Africa showed surprising resilience, with a moderate decline of just 9% in the first half of 2024, according to a report from CV VC and Absa. This performance is driven by growing local adoption of blockchain solutions, which compensate for the structural weaknesses of African economies.
In 2023, African blockchain projects raised $135.4 million through 17 transactions. Despite a challenging global environment, the first half of 2024 saw 12 new deals totaling $34.7 million, an increase of 9% compared to the previous year. Blockchain now represents 6.4% of venture capital financing on the continent and 12.5% of venture transactions, well above global averages.
According to McKinsey, blockchain plays a critical role in cross-border payments, identity verification and financial inclusion. It could reduce transfer fees, which cost Africa $5 billion each year, by up to 90%. By making transactions faster and more transparent, blockchain is becoming an essential lever for transforming the African financial sector.
With the continued rise of blockchain, its impact on accelerating African fintech revenues, projected at $47 billion by 2028, is clearly confirmed. According to McKinsey, blockchain goes beyond the status of a simple emerging technology: it is establishing itself as a strategic lever of innovation and transformation for the entire African financial ecosystem.
Moral of the story: in Africa, where there is a telephone, there is a fintech revolution on the way!
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