The Sub-Saharan Africa (SSA) has emerged one of the fastest growing financial technology (Fintech) hubs in the world over the last 12 to 18 months.
Investment in African fintechs nearly quadrupled in 2018 to $357 million, with startups in Kenya, Nigeria and South Africa accounting for the largest share, trend that continued into 2019, with a number of high-profile deals.
For example, three Nigerian fintech start-ups – Kudi, OneFi and TeamApt, each raised around $5 million in funding during the first half of the year.
The Global System for mobile Telecommunications Association (GSMA), which gave the statistics, said huge opportunities await Fintech’s investors, stressing that emerging markets including Nigeria, Kenya, and South Africa hold huge potential for fintech innovations.
GSMA further added that 395.7 million registered mobile money accounts now exist in the region and that nearly nine in 10 registered mobile money accounts are in East and West Africa.
According to the body, which is in charge of over 800 telecoms companies globally, over the past year, several underserved markets in the region have taken steps to accelerate mobile money adoption and, by extension, financial inclusion among citizens.
The body noted that in Nigeria, regulatory reforms introduced in October 2018 allow mobile operators to obtain licences to operate payment service banks (PSBs), while in Ethiopia, an ambitious financial inclusion strategy has been attracting investment into mobile money services.
Indeed, reforms in Nigeria have seen MTN getting Super Agent license on Tuesday from the Central Bank of Nigeria, with other telecoms to follow suit.
GSMA noted that the Angola’s national bank plans to submit new laws governing payment systems, including mobile payments, to parliament for approval in 2019.
The telecoms body said these developments notwithstanding, future growth of mobile money services in the region, will be largely driven by interoperability of mobile money services.
Account-to-account (A2A) interoperability gives users the ability to transfer between customer accounts held with different mobile money providers and other financial system players.
It also disclosed that Tanzania led the way in 2014, but several countries across the region, including Kenya, Rwanda, Nigeria and Ghana, have now launched interoperability projects and use cases.