Most fintech investments in Africa go towards financing mobile money – Report
As fintech financing continue to increase in Africa, most of it is going towards funding mobile money ventures. This is according to a new report by American research group, the Brookings Institute.
The report found that Africa is currently the largest adopter of mobile money transfer systems in the world. And this has been facilitated by the high influx of foreign capital, most of which have gone towards funding mobile money ventures.
As you may well know, African fintechs have been striving to bridge the continent’s financial inclusion gap.
They are leveraging the opportunities provided by increased internet penetration and the proliferation of mobile telephones; coupled with the growing interest and willingness of foreign venture capitalists to invest.
“Importantly, the continent is already the largest adopter of mobile money transfer systems (Figure 1), comprising nearly half of the globe’s registered mobile money customers, approximately 70 percent of global mobile money transactions, and two-thirds of the transaction volume by value,” said part of the report which was obtained by Business Insider Africa.
Mobile money (or mobile payment) basically entails the tech-enabled performance of various forms of financial transactions on a mobile device.
In Africa, this form of cashless transactions are encouraged and targeted mainly at the millions of people in rural areas who are either under-banked or unbanked.
Little wonder African fintechs specialising in digital payments and digital lending have been dominating both in terms of fundraising and transaction volume.
The report concluded by arguing that fintech could potentially revolutionise the financial sector in Sub Saharan Africa. In the same vein, the fast growth rate recorded by the sector should encourage more investors to pay attention.
More so, there is need for concerted efforts from other stakeholders (including telecom services providers to continually improve the technologies that enable financial technology.
