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Africa’s Fintech Revolution: Bridging the Financial Inclusion Gap

August 16, 2023

Africa’s Fintech Revolution: Bridging the Financial Inclusion Gap

Africa is experiencing a fintech revolution that is reshaping the way money flows across the continent. This transformation is not only fostering […]

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Africa is experiencing a fintech revolution that is reshaping the way money flows across the continent. This transformation is not only fostering financial inclusion but also driving economic growth, with a unique focus on change readiness and customer-centric approaches. In this article, we delve into the key aspects of Africa's fintech landscape and explore how it is changing lives and businesses.

Fintech's Impact on Financial Inclusion

Africa's fintech sector has witnessed remarkable growth in recent years, particularly in North Africa, the Middle East, and sub-Saharan Africa. This expansion is driven by the urgent need to provide financial services to the millions of unbanked and underbanked individuals and businesses across the continent.

One of the most significant achievements of fintech in Africa has been the expansion of financial inclusion. Over the past decade, fintech has enabled 1.2 billion previously unbanked people to gain access to essential financial services. This represents a 35 percent reduction in the global unbanked population. By broadening financial inclusion, more people and small enterprises can save money, receive government payments, engage in business transactions, and secure their earnings safely.

Addressing Cash Dominance

Despite the growth of fintech, cash remains the preferred mode of transaction in many rural and underserved urban communities across Africa. This reliance on cash transactions comes with higher costs, difficulties in buying and selling goods, and increased exposure to theft and fraud. Traditional banks have hesitated to serve individuals with small incomes and limited savings, leaving a significant portion of the population underserved.

However, fintech has emerged as a promising solution to these challenges. African fintech companies are addressing the needs of these millions of unbanked individuals who represent a substantial economic force. By offering digital banking services, fintech is providing a viable alternative to cash transactions, making financial services more accessible and secure.

Fintech's Role in Supporting Small Businesses

Small and medium-sized enterprises (SMEs) play a crucial role in the African economy, accounting for 90 percent of businesses and generating seven out of every ten jobs. The COVID-19 pandemic hit the continent's informal business sector particularly hard. Fintech stepped in to assist micro, small, and medium-sized enterprises (MSMEs) by offering online transactions for small amounts, microloans, and digital platforms for conducting business.

For example, South African fintech company Adumo, supported by the International Finance Corporation (IFC), has empowered small businesses to grow by accepting digital payments for the first time. The growth in fintech funding in 2021, with 63 percent of it going to fintech companies, indicates the sector's potential to support and revitalize Africa's small business landscape.

The Role of Investors and Change Readiness

While Africa's fintech landscape thrives, it is essential to understand the unique strategies employed by African startups, which differentiate them from their Western counterparts.

Western startups often prioritize securing venture capital, focusing on investors' needs and preferences. In contrast, African entrepreneurs prioritize market acceptance. Rather than dedicating extensive efforts to securing capital, they emphasize developing marketing materials tailored to their target customers.

Engaging individuals is another distinction. Western culture tends to be individualistic, which can hinder forming strategic alliances. African entrepreneurs leverage communal societies, building relationships and affiliations with other firms to acquire resources and support their growth.

Furthermore, the celebration of external fundraising is a common practice in Western startups. In Africa, the focus shifts to external validation through milestones like certifications, government approval, and operating licenses.

Case Studies of African Success

Several African fintech companies exemplify these strategies. Companies like Sycamore, Payhippo, and Bankly have achieved remarkable success by embracing these priorities. They prioritize market acceptance over investor readiness, engage with stakeholder communities rather than individuals, and celebrate concrete milestones to validate their impact.


Africa's fintech revolution is not only changing the financial landscape but also fostering economic growth and inclusion. By prioritizing change readiness and customer-centric approaches, African fintech companies have been able to thrive and make a substantial impact on society.

As the continent continues to embrace digital finance, there is immense potential for fintech to play an even more integral role in Africa's economic development. By addressing the unique challenges faced by unbanked populations and small businesses, fintech is contributing to a more inclusive and prosperous future for Africa.

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