New research from Disrupt Africa found that fintech startups represented 30% of the total capital invested in new African companies. One area that many of these fintech startups are focused on is helping the 80% of the continent's population that has no access to formal banking services.
In Africa, the reasons for the increased funding are clear. Traditional banking has failed on the continent, with 330 million adults, around 80 per cent of the continent’s population, lacking access to formal financial services. That’s a huge gap that fintech startups can fill with innovative solutions. What is more, Africans have already demonstrated they are more than willing to adopt new ways of transacting if they are made readily available. For all its limitations, M-Pesa has been a huge success, with transactions reaching US$656 million in 2014 and projected to double over the course of the next four years. Akinola Jones is co-founder of Nigerian fintech startup Aella Credit, and says the appeal of fintech to investors is based on its huge potential to solve a massive problem and reach millions of people.