According to the survey, financing for African fintech companies increased by 894 per cent in 2021 compared to the previous year. This growth rate was the highest over the previous five years and was second highest in the Middle East, Africa, and Pakistan area.
As per the report, Sub-Saharan Africa received USD 1.56 billion in funding, by far the most in the area.
“Startups in Nigeria accounted for a third of all money invested in fintech in 2021, making it a key fintech hub in the Middle East, Africa, and Pakistan.
Fintech accounted for 71% of all venture financing in Nigeria, it stated. Global fintech funding, according to the report, increased to a new high of USD 131.5 billion in 2021.
“There were 235 fintech unicorns, 34 of them were born in Q4-2021. Fintech firms now account for more than 20% of the value of all tech unicorns, up from 15% the year before, the report stated.
According to the report, the fast-expanding industry includes a number of interesting sub-segments, including peer-to-peer (P2P) lending, equity crowdfunding, digital payments, e-money, international remittances, and digital money.
On the demand side, it said that MSMEs have played a key role in the expansion of the fintech industry.
The reports states that Kenya, Nigeria, and South Africa are among the African nations spearheading the shift to digital payments, with infrastructure and regulatory frameworks that support growth already in place or rapidly emerging.
The article states that the payments segment dominates the fintech market and Nigeria is a significant player in the financing of tech startups in Africa.
It stated that with 88.4% of Nigerian tech firms situated there, Lagos is one of the continent’s key startup hotspots. According to a Mastercard report, the number of fintech companies in Africa increased by 81% in 2021, with South Africa, Nigeria, and Kenya emerging as the continent’s major centres.
This information was provided by Mastercard, a multinational technology corporation in the payments sector, in its latest research titled “The Future of Fintech: Rapid Growth Smart Capital” on the state of fintech in African countries.
The report found that there were 311 fintech startups in Africa in 2019 and 564 in 2021.
According to the report, the industry was responsible for 27% of the record-breaking volume of deals concluded and 61% of the USD 2.7 billion invested in Africa in 2021.