Fintech startups in Africa grew 81% in 2021, with South Africa, Nigeria, and Kenya emerging as key hubs on the continent, this is according to study by Mastercard on the state of fintech in the continent.
The fintech sector accounted for 27% of the record-high number of deals closed and 61% of the US$2.7 billion deployed across Africa in 2021.
The study shows that fintech innovation in Africa has been driven by the need to resolve multiple pain points, with a focus on increasing financial and digital inclusion. South Africa, Nigeria and Kenya were also seen as among the countries leading the transition to digital payments, with infrastructure and policy frameworks that enable this growth firmly in place.
The growth in the number of fintechs in Africa is reflective of global fintech funding which jumped to a new record of US$131.5 billion in 2021. The number of fintech unicorns reached 235 with 34 alone born in Q4-2021. Fintech companies now represent more than 20% of total tech unicorn value, compared to 15% in the previous year.
Africa fintech start-ups showed exponential growth in 2021
In terms of funding, Africa’s fintech startups recorded 894% year-on-year growth in funding in 2021, the second highest in the Middle East and Africa region. Nigeria emerged as a leading fintech hub across the Middle East and Africa as start-ups there accounted for a third of all funding deployed into fintech in 2021.
The rapidly growing sector comprises sub-segments of particular interest, including digital payments, e-money, international remittances, peer to peer (P2P) lending, and equity crowdfunding.