FintechHow Mobile Money Dominates Fintech Investment in Africa.

Joyce ObuyaFebruary 4, 202329012 min


Sub-Saharan Africa has historically had limited access to formal financial services including credit, insurance, and banking. Financial technology, or “fintech,” is advancing financial inclusion in this region. In this article, we shall look into the impact mobile money has had in Africa and how mobile money dominates fintech investment in Africa

Fintech users are using the tool in increasingly sophisticated ways, as seen in a recent paper by Financial Technology Partners, a boutique investment banking firm, which reveals encouraging investment trends in the African FinTech industry.

While in recent years the opportunities made possible by this technology have opened doors for many in the region especially low-income household users of fintech who are using the tool in increasingly sophisticated ways.

Image source: pixabay

Despite this accomplishment, obstacles still exist to using the technology in novel and creative ways: The authors of a recent paper by Financial Technology Partners assert that mobile money services still have sizable development potential in the area due to the persistently low penetration of cellular and internet networks, particularly in rural Africa.


The dramatic increase in funding obtained by African fintech businesses shows how important digital financial services are now and will continue to be on the continent. Since 2016, both the number of transactions and the amount of funding in this digital sector have grown steadily.

By funding and transactional metrics, digital payments-focused fintech companies dominate the sub-Saharan African fintech investment market. While receiving 40 percent less funding than digital payment services,  fintechs focused on digital banking and lending services is behind in terms of investment transactions.

Notably, South Africa, Nigeria, and Kenya are the continent’s three largest digital centers and are home to many of the local fintech businesses in the area. The authors point out that African fintech firms primarily operate within their country of origin or regionally as a result of fintech’s geographic concentration in Africa and it’s limited but growing access to financing and business scaling. As a result, Africa’s digital payment systems are highly fragmented.

Right after the Covid-19 outbreak began in early 2020, the two major mobile money markets in Africa, Kenya, and Ghana, were the first to eliminate fees on primarily smaller transactions. Fee restrictions and tax rebates for mobile money were quickly adopted by other African countries.

More than 20 African nations’ authorities and central banks either halted or decreased mobile money taxes, although they also increased limitations and imposed transaction fees or waivers on mobile service providers.

Côte d’Ivoire, Senegal, Rwanda, Malawi, Uganda, Kenya, Nigeria, Gambia, Mali, the Democratic Republic of the Congo, Liberia, Egypt, and Morocco are a few of the nations that implemented these regulations. These limits, according to local media accounts, are intended to provide millions of largely P2P and cash-to-wallet retail mobile money users more control during the Covid-19 pandemic’s height.

While certain cross-border transfer charge limitations continue to be in place, several governments additionally implemented or increased mobile money levies to assist offset the losses brought on by the epidemic.

These central government-imposed procedures have proven to be quite successful and will probably continue to be used in some nations for the foreseeable future. Mobile money providers are gradually changing in certain areas while being strengthened in others, despite the audience’s initial resistance to the idea. When the Covid-19 outbreak first started, the Ghanaian government enacted fee limitations, increased shipping limits, and reinforced some of those measures a year later.

According to The Africa Report, ZeePay, a Ghana-based company with operations in 15 African nations, has a turnover of $1.1 billion in 2020, according to Andrew Takyi-Appiah, managing director. This has also helped to reinforce Ghana’s action and provided transparency and efficiency while increasing mobile money usage.

Mobile money providers, on the other hand, have objected to the imposition of increased charges on international and other transactions that have been implemented in several markets. Tanzania abolished an existing 10 percent mobile money transaction tax during the Covid-19 epidemic and implemented a new pocket-dependent charge beginning in July 2021 to fund Covid-19-related public expenditure initiatives.

According to the authors of a recent paper by Financial Technology Partners, the rise of mobile financial services shows how fintech has the potential to change financial inclusion in sub-Saharan Africa. According to the authors, the region’s demographic characteristics, including its sizeable and rapidly rising population, expanding middle class, and severely undeveloped financial services industry, indicate that demand for digital financial technology in the region is on the rise.

In order to continue enabling equal access to finance for all Africans, the authors advise increasing the penetration of telecommunications infrastructure for African customers who rely on fintech advances to gain access to essential financial services.

For more on fintech in Africa:

Blockchain Application in the Remittance Space.

A Guide to Fintech Exchange Traded Products (ETPs)


Joyce Obuya

Relevant experience as a content writer. Highly proficient in Keyword Research and its tools. Experienced writer in both short-form and long-form blogs as well as Business Publications

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