Africa’s fintech revolution: market to reach $65bn in revenue by 2030, but challenges remain

Africa’s fintech market is poised for significant growth, projected to reach a $65 billion in revenue by 2030, which represents a 13-fold increase over 2021, according to a new study conducted by consulting firm Boston Consulting Group (BCG) and QED Investors, a global VC based in the US.

This development will make Africa the world’sfastest-growing region, alongside Latin America, which is predicted to see 12.5-fold growth. North America, in contrast will only see a 4.4 times increase, although revenues there and in the Asia-Pacific region will remain far ahead of the rest of the world. The study also projects a compound annual growth rate (CAGR) of 32% for African fintech revenue until 2030. However, as this remarkable growth takes shape, the study also cautions that it becomes crucial to critically examine the potential costs and implications that accompany this transformative journey.

With 57% of Africans being still unbanked, according to the World Bank, BCG’s Rishi Varma, coauthor of the Global Fintech report, believes fintech could be a vehicle to solve the access issue and promote financial inclusion. BCG attributes Africa’s fintech sector growth to “leapfrogging in technology” and the emergence of new fintech champions. The continent’s youthful population, which is increasingly digitally literate, combined with its low credit card penetration, presents a tremendous opportunity for digital banking.

“In Nigeria, 73% of adults own mobile phones, yet the penetration of credit cards is a mere 2%,” says Aparna Pande, a consultant at BCG and co-author of the report, adding that ”this discrepancy presents a significant opportunity for fintech companies to bypass the limitations of traditional banking systems.”