Understanding Africa's Fintechs

Innovation in the informal banking sector has led to growth in products and services for the unbanked

This post is a collaboration with Xolani Shezi. Xolani is an fintech specialist and consultant, based in South Africa.

Mount Kilimanjaro, Tanzania - Photo by Sergey Pesterev

As population decline is set to take place in many countries, one thing to ponder:

Over the next three decades, the world’s working-age population will increase by 2bn, and almost 80 per cent of those workers will be coming of age in Africa.

With a growing young population, is Africa ripe for fintech innovation?

Research by the Boston Consulting Group forecasts that fintech revenue on the continent will go from $5bn in 2021 to $65bn by 2030. In the same period, fintech revenue in North America will grow from $130bn to $520bn, and in Europe, it will grow from $34.5bn to $190bn.

The revenue growth multiple is forecasted to be 13x in Africa, 4x in North America, and 5.5x in Europe. While the absolute growth numbers are smaller in Africa, the growth multiple is much higher.

The numbers look attractive, but there are many cha…