Project

Finance in Africa 2024 - Chapter 5: Digital financial services in Africa

European Investment Bank

DOI: 10.26303/fg2a-5f94

What is it about?

The fintech sector continues to grow, with the number of active fintech companies reaching 1 263 in 2024, up from 1 049 in 2022, and 450 in 2020. In January 2024, payment solutions dominated the sector in Africa, offered by 33% of the fintech firms. Lending was the second most popular product area, offered by 19% of firms. The share of people with a mobile money account in sub-Saharan Africa has almost tripled to 33% in 2021 from 12% in 2014, while the share of people with traditional financial accounts has grown at a much slower pace (40% in 2021 vs. 29% in 2014).

Banks in the European Investment Bank (EIB) survey see strong incentives to partner with fintech companies. The main perceived benefits from partnering with fintech companies are: improving the customer experience (100% of the survey sample) and accessing innovative technology (95%).

Why is it important?

Perhaps the greatest change in the African banking sector in the last decade has been the growth of non-traditional financial services. This includes mobile money accounts and fintech operators but also agency banking models. These new approaches have been key drivers of increased financial inclusion on the continent, growing more quickly than traditional banking services.

At the same time, banks themselves have become more digital, with our banking survey showing that most banks offer digital services online. In addition, many banks partner with fintechs to improve customer experience or gain access to new technology. Understanding this evolving environment is important, as the EIB aims to support increased digitalisation and financial inclusion on the continent.

Perspectives

Financial inclusion continues to grow, driven by access to digital financial services in particular. Our review of the fintech landscape tracked 1263 fintech firms active in Africa in 2024, compared to 450 in 2020, and surveyed banks are more active in offering digital services to their clients.

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Who is involved?