Africa’s Fintech Potential


Lizzy Chesters, Professional and Financial Services

Africa’s Fintech Potential

Although most of us have smartphones, very few of us regularly use them for making payments. Instead, we will use a contactless credit or debit card, or cash drawn from our bank accounts. Mobile payments and wallets are useful in theory but in the West their uptake has not been as rapid as predicted.

In Africa, a continent in which 80% of people do not have a bank account, mobile payments and mobile money transfers are widespread.

Why are Mobile Financial Services so popular in Africa?

Fixed-line internet has never been properly introduced in Africa but increasingly affordable connected devices, like smartphones, are understandably popular. As a result, Africans – whose average age is just 18 – are gravitating towards mobile internet at an accelerated rate.

At the end of 2014, mobile broadband accounted for just 17% of the 884 million total mobile subscriptions in Africa; by the close of 2020, that figure is expected to have risen to 76% of total subscriptions, which will have grown to 1.32bn.

For comparison, mobile phone internet user penetration in North America currently stands at 75.1% and is projected at 87.2% by 2019. Though mobile internet usage is currently comparatively high, the rate of uptake is comparatively slow.

Given the popularity of mobile internet – which has been allowed to develop unhindered, thanks to the relative non-existence of out-dated technologies like fixed-line internet – it is natural that Mobile Financial Services should have had such high uptake in Africa.

Mobile wallets and Bitcoins

The number of people that own a mobile wallet in Africa is three times that in the USA (183 million) and is expanding at three times the pace. In Kenya, 58% of adults access their money via a mobile device.

Africa has leapfrogged the notion of inefficient financial institutions, like banks, and opted instead for efficient fintech. The use of Bitcoins is also on the rise: by the end of 2015 there will be a million bitcoin wallets in Africa and a third of Kenyans will be using a Bitcoin wallet.

Mobile Financial Services and economic development

According to a report by The World Bank, Sub-Saharan Africa is evidence of that fact that mobile money accounts can drive financial inclusion. While just 1% of adults globally say they use a mobile money account and nothing else, in Sub-Saharan Africa 12% of adults (64 million adults) have mobile money accounts, compared to just 2% worldwide.

M-PESA, the Mobile Money service offered by Safaricom in Kenya, is the global leader in mobile money transfer and is currently in possession of £1.3 billion worth of transactions a month. Indeed, 59% of Kenyan adults use the service and it makes up nearly 70% of all transactions that are processed by the national payments system. Users can pay bills, top up their petrol, take out loans, and have their salary paid directly into their Mobile Money account.

The popularity of M-PESA and the possibilities for fintech in Africa has not gone unnoticed: last month Barclays bank revealed that it is launching a financial technology start-up in Africa.


Advances in fintech could help to rapidly increase the speed of economic development across Africa. However there are some obstacles: skills shortage due to lack of basic education, funding shortages, cyber-security and regulation. Nonetheless, fintech is primed for success in Africa – it is a blank canvas, allowing the inventive and the original to develop new technologies that will not only help to advance economic development but improve and simplify people’s daily lives.