Affordable mobile connectivity, influx of funding, increasing smartphone ownership, and increasing supportive regulatory frameworks will boost the fintech market in Nigeria and other African countries, GSMA has disclosed.
Sub-Saharan Africa’s fintech industry has been bolstered by a surge in innovative solutions and growing funding and investments, the global association for telecommunications firm said. This industry is set to even grow further in the coming years as requisite conditions get better.
The association revealed this in its ‘The Mobile Economy Sub-Saharan Africa (2023)’ report. It predicted that a shift toward digital lifestyles may ensure that the fintech market in the region grows by 10 per cent per annum until 2025.
It stated, “The growth of fintech varies significantly across the region, with matured markets such as Kenya and South Africa leading the way, while countries such as Ghana and Nigeria have high potential.
“With a rising shift towards digital lifestyles, regulatory initiatives continue to emerge in the region to support fintech solutions for financial inclusion. For example, Nigeria, Ghana, and Uganda have introduced programmes to stimulate financial inclusion and increase digital cash transactions.
“The programme will encourage fintech stakeholders to innovate with new product offerings. Likewise, there are a number of regional initiatives, such as the Pan-African Payment and Settlement System, which supports instant crossborder payments in local currencies and expanded its operations in 2022. Such regional and national initiatives aid collaboration opportunities, encouraging the growth of digital payment networks.”
Payments and wallets are expected to be the fastest-growing products in the region. The growth in fintech services has ensured that mobile operators like MTN and Airtel Africa are looking to beyond basic connectivity to venturing into the fintech space by enhancing mobile money services, along with an increase in collaborations with fintech companies and financial institutions, GSMA noted.
Commenting on other things that are fueling the growth of mobile financial services on the continent and how mobile operators are increasingly gaining traction in the space, the association stated, “The growing role of mobile financial services in Sub-Saharan Africa has been supported by an improved regulatory outlook, which is allowing further innovations.
“These regulatory developments have opened new avenues of growth for the fintech sector and present opportunities for mobile operators to expand services and generate additional revenue streams. By leveraging their existing infrastructure and customer data, operators can continue to create new value-added services for customers.”
Despite the interdependence of mobile connectivity and the growth of online financial services, 15 per cent of the population in Nigeria and other Sub-Saharan Africa countries are not covered by mobile broadband networks. These unserved areas, which are largely in rural and remote areas, are cut off from enjoying fintech services.
Commenting on the usage gap, Director General of the GSMA, Mats Granryd, said, “The mobile industry has seen remarkable growth across Sub-Saharan Africa and now reaches almost 490 million unique subscribers – but only one-in-four people in the region subscribe to the mobile internet.
“MWC Kigali provides a forum for policymakers and leaders in connectivity to come together and discuss ways of accelerating the digital transformation of Africa, closing the usage gap and, ultimately, ensuring everybody in the region benefits.”
There are 27 million Nigerians living in areas without telecom services, according to the Nigerian Communications Commission. These Nigerians are not only cut off from mobile connectivity but the attendant benefits of connectivity.
The immediate past Executive Vice Chairman and Chief Executive Officer, NCC, Prof. Umar Danbatta, said, “By 2022, we have reduced the clusters of access gaps to 97 from 207 in 2013. The number of Nigerians again has come down from 37 million in 2013 to 27 million as we speak.”