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How Fintech is helping the unbanked in sub-Saharan Africa

The sub-Sahara Africa financial infrastructure is less-developed, and most of its population is unbanked. In order to ensure easy access to financial services to this large unbanked population, fintechs have the potential to fix that friction, which will play an important role in improving financial inclusion.Despite the amount of constraints for most African population to get access to traditional banking services, the near-universal availability of mobile phones has allowed millions to access mobile money services. The  region has attracted about 10% of GDP in transactions that occurs through mobile money, which can be compared with just 7% of GDP in Asia and less than 2% of GDP in other regions in 2019.Money accounts now surpass bank accounts in the region, and greater financial inclusion has benefited large swathes of the population that remain unbanked which is about 60%, including women and those who are poor or young mostly rural areas.

Fintech companies split into local (80%) and international (20%) players. The number of fintechs has grown at a Compound Annual Growth Rate (CAGR) of 24% over the past 10 years.

Fintech Investment in sub-Saharan Africa

Perhaps, local and foreign investments stacks in genetics reached more than US$100m over the last two years. Foreign investors are now finding new destinations in genetic emerging market hubs such as Ghana, Uganda, Cameroon and Rwanda.

However, the sub-Sahara Africa fintech ecosystem comprises of over 260 active companies split into local (80%) and international (20%) players. The number of genetics has grown at a Compound Annual Growth Rate (CAGR) of 24% over the past 10 years.

Helping the unbanked through financial technology

Fintech companies are impacting multiple key aspects of people’s lives in sub-Saharan Africa with over 20 companies that use mobile phones and financial technologies to serve and promote sustainable development. Some examples include: startups that supply energy through solar panels and enable payment through mobile phones health insurance and hotlines companies facilitated through mobile-based subscriptions; financial identity and credit scoring assessed through mobile usage and behavior and more.

To conclude this, African’s will continue to open-up the frontier as far they worth opening-up, by adopting new technologies, build globally accepted products that will drive the continent towards staggering growth, opening new horizons and opportunities for the population in years to come.

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