Fintech in Africa to Reach $1.5 trillion by 2030


Emerging economies will lead the way as Fintech gains momentum. Asia-Pacific is poised to outpace the US, becoming the world’s largest fintech market by 2030, while Africa will be the fastest growing region. According to a report, Africa’s fintech market  – led by South Africa, Nigeria, Egypt, and Kenya – is projected to grow thirteenfold to $65 billion in 2030, and will have a projected compound annual growth rate (CAGR) of 32%.

Despite fintech’s losing more than half their market value on average in 2022, the plunge was merely a short-term correction in an otherwise long-term positive trajectory, as the industry’s fundamental growth drivers haven’t changed.

Caio Anteghini, partner at BCG, Johannesburg explains,”Globally and in Africa, the fintech journey is still in its early stages and will continue to revolutionise the financial services industry as we know it,” adding, “Even though financial services remains one of the most profitable sectors of the economy worldwide, it struggles with innovation and customer experience remains poor.

More than half the world’s population remains unbanked or underbanked, with the majority in emerging economies, and technology continues to unlock new use cases in leaps and bounds.”

A New Wave of Emerging Fintech Leaders

Historically an underpenetrated market with nearly $4 trillion in financial services revenue pools, Asia-Pacific (APAC) is poised to outpace the US and become the world’s top fintech market by 2030, with a projected compound annual growth rate (CAGR) of 27%.

The region’s fintech growth will be driven primarily by Emerging APAC, namely China, India and Indonesia. These countries have a high number of small and medium-sized enterprises, and a rising tech-savvy youth and middle class.

Leading the Next Era of Fintech Growth

While payments led the first part of the fintech journey – and will remain the largest fintech segment in 2030, growing fivefold to $520 billion – B2B2X (B2B to any user) and B2b (serving small businesses) will lead the next era.

B2B2X is made up of B2B2C (enabling other players to better serve consumers), B2B2B (enabling other players to better serve businesses), and financial infrastructure players. The B2B2X market is expected to grow at a 25% CAGR to reach $440 billion in annual revenues by 2030, supported by growth in embedded finance and financial infrastructure.

The B2b fintech market is expected to grow at a 32% CAGR to reach $285 billion in annual revenue by providing solutions to credit-starved and poorly served small businesses.

Small to mid-sized enterprises (SMEs) worldwide have an estimated $5 trillion in annual unmet credit needs, and account for close to 70% of jobs and GDP globally, according to the World Economic Forum.

In Africa, SMEs provide over 80% of all jobs across the continent – showcasing the enormous opportunity for growth for fintechs in this space.

Spreading the Opportunities in Emerging Markets

Spread businesses, which include banks and neobanks, lending platforms, mortgage lenders, and credit unions, will face challenges in developed markets. They will need to access stable and low-cost sources of deposits in order to reduce their cost of capital – such as by acquiring a bank license.

In emerging markets, on the other hand, neobanks play a key role in expanding financial access and inclusion. There are opportunities in insurance and wealth management, and B2B2X (enablers) will be able to seize significant opportunities.

The role of regulators

Regulation of fintechs has traditionally been relatively light, non-proactive, fragmented, and, in some cases, even lagging behind.

While recent bank crises have made them more sensitive to asset/liability management, in addition to creating guardrails, regulators must ensure they are not overregulating the industry and thereby stifling innovation.

Regulators should consider leveling the playing field via such actions as enabling faster pathways for banking and payment institution licenses, facilitating an open banking ecosystem, and supporting digital public infrastructure.

“The rise of new technologies has created a need for next-gen infrastructure that can facilitate complex transactions in a more digital world – and systems that facilitate the delivery of essential services and benefits to the general public, such as digital ID and verification, can promote economic expansion, especially in emerging markets,” says Anteghini.

The combination of digital identity, an API-enabled payments network allowing for real-time settlements, and access to innovators to build use cases is increasingly becoming a solution to fast-track digital services – and showing particular value in markets where cash is still dominant, such as South Africa.

A Focus on The Future for Fintechs and Incumbents

The landscape today is much different than it was in 2021 and early 2022 when so many fintechs were able to attract higher funding. Today, fintechs need to conserve cash and stretch their runways to get through the “funding winter” without resorting to raising money at lower valuations.

They should therefore focus on their core business, strengthen their competitiveness and pursue aggressive strategies such as talent acquisition, gain market share by entering new geographies/markets, and explore M&A opportunities—while also taking an active role in shaping and embracing forward-looking regulations that enhance customer confidence and drive higher valuations.


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