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Mastercard Study: African Fintech Sector Had One of the Highest Year-on-Year Growth Rates in Funding in 2021 – Fintech Bitcoin News
In 2021, African fintech startups accounted for 61% of the $2.7 billion in enterprise capital funding that was deployed on the continent, a brand new examine has discovered. Whereas its share of world fintech funding is simply over one %, the continent’s fintech sector nonetheless recorded one of many highest year-on-year development charges globally.
‘Report-Excessive Variety of Offers Closed’
In response to the findings of a brand new Mastercard examine, African fintech startups — whose quantity grew from 311 in 2019 to 564 in 2021 — accounted for “61% of the USD 2.7 billion deployed throughout Africa in 2021.” The findings additionally present that fintechs’ share “of the record-high variety of offers closed” in that yr was 27%.
When put next with the $131.5 billion that was raised globally, African fintech’s share of the whole stays very low — simply over 1% of the 2021 whole. Nevertheless, when it comes to the funding development fee, the examine famous that the continent — the Sub-Saharan Africa area specifically — had one of many highest year-on-year development charges globally. The examine report defined:
Within the Sub-Saharan Africa (SSA) area, fintech startups recorded 894% year-on-year development in funding in 2021 – the second highest within the Center East, Africa, and Pakistan area in the course of the interval, and the best yearly development fee over the previous 5 years. SSA obtained USD 1.56 billion in funding, the best within the area by a large margin.
Regarding the funds raised by fintech startups per nation, the examine findings present that Nigeria, which is dwelling to among the continent’s fintech unicorns, had in truth emerged as a number one fintech hub not simply in Africa however throughout the Center East and Pakistan. In response to the examine’s findings, the West African nation’s fintechs alone “accounted for a 3rd of all funding deployed into fintech in 2021.” Throughout the nation, fintechs’ share of all enterprise capital raised throughout the identical interval topped 71%.
Fintechs and the Monetary Exclusion Hole
Concerning why the fintech sector continues to get a disproportionate share of the funding, the examine, titled the “Way forward for Fintech in Africa,” factors to the continent’s longstanding monetary exclusion hole and the way fintechs are “constructing inclusion from the bottom up.”
A lot of the sector’s previous and projected success sooner or later can also be tied to improved smartphone penetration. As proven within the 2022 GSMA report, there’s an expectation that the variety of smartphone connections will develop from the 6.2 billion seen in 2021 to 7.5 billion by 2025.
In the meantime, the report recommended that Nigeria, together with South Africa and Kenya, will proceed to drive the sector development. Nevertheless, the examine recommended that the fintech sector development fee will depend upon regulators’ and policymakers’ continued prioritization of “reasonably priced web and cell penetration.”
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