Africa’s growing fintech sector transforms fin-services, but funding costs are obstacle — EIB report

The number of fintech companies in Africa have almost tripled this year compared with 2020 as financial conditions across the continent ease, though funding costs are still an obstacle to further growth, according to a new report by the European Investment Bank (EIB).
This progress is thanks to the improving access to finance for people and businesses across Africa, according to the EIB report entitled ‘Finance in Africa 2024’. “Fintech is revolutionizing the way we think about finance in Africa,” said EIB Vice-President Thomas Östros. “By leveraging technology, we can improve access to finance for millions and foster sustainable economic growth.” The number of African fintech companies jumped to 1,263 in 2024 from 450 in 2020, thus expanding much faster than the traditional banking sector.
While the report highlights a number of improvements in the African financial sector, it also brings out constraints for the region’s economic growth, notably the lack of capital and cost or availability of funding that one-third of African banks report as a problem. The fall in the private-sector credit from 56% of gross domestic product in 2007 to 36% in 2022 has hindered growth in productive economic assets, impeding industrialization on the continent. “While we see some signs of improvement, the high cost of finance remains a source of concern,” said EIB Chief Economist Debora Revoltella. The ‘Finance in Africa’ report includes data from the ninth annual EIB Banking in Africa survey that details diverse challenges and confirms resilience of the African banking sector.