The Rapid Expansion of Mobile Connectivity in Sub-Saharan Africa is Driving The Growth of The Fintech Sector
In Sub-Saharan Africa, mobile connectivity has continued to accelerate substantially which has significantly driven digital transformation, and is particularly propelling the growth of the Fintech industry in the region.
While 3G remains the most dominant technology in the region, the adoption of 4G has accelerated, partly driven by the growing demand for faster speeds among younger consumers. Over the next five years, the 4G technology has been predicted to double to 45%.
5G is also gaining momentum in the region, although the initial focus for the technology deployment is on urban areas and industrial locations, where there is a greater need for the technology. In 2030, 5G is expected to contribute $11 billion to the Sub-Saharan African economy, accounting for more than 6% of the overall economic impact of mobile.
With an influx of affordable internet connectivity and increasing supportive regulatory frameworks, the Fintech market in Africa is set to grow exponentially. The rapid expansion of mobile connectivity in Sub-Saharan Africa is a driving force behind the advancement of the Fintech sector in the region.
The surge in mobile connectivity is having profound and transformative effects on financial technology in Sub-Saharan Africa, which has become a game-changer for financial inclusion in Africa.
The improved mobile connectivity is making it possible for many people who were previously unbanked or underserved by traditional financial institutions to now access a range of financial services through their mobile devices.
Also, accelerating mobile connectivity in Sub-Saharan Africa has facilitated the development of alternative credit scoring models, allowing Fintech companies to extend credit to individuals and small businesses that were previously deemed high-risk or lacked traditional credit histories.
Notably, the continent’s unique circumstances and the widespread adoption of mobile technology have created a fertile ground for Fintech innovation leading to several transformative impacts, such as the streamlining of faster cross-border remittances, expansion to rural and remote areas, and investment opportunities amongst others.
Beyond basic Mobile connectivity, mobile operators in the region have ventured into the Fintech space by enhancing mobile money services along with an increase in collaborations with Fintech companies and financial institutions.
Earlier this year, giant telecommunications company MTN and global payments giant Mastercard announced a partnership to enable Mastercard’s virtual cards to be linked with MTN’s MoMo wallets.
This partnership allows for the expansion of their services by leveraging the networks of both companies. Similarly, in August 2023, Airtel Africa and Mastercard announced the launch of a new cross-border remittance service.
The service will enable Airtel subscribers across 14 African markets to send and receive money safely and securely, with speed and certainty.
It is also worth noting that the growing role of mobile financial services in Sub-Saharan Africa has been supported by an improved regulatory outlook, which allows for further innovations.
These regulatory developments have opened new avenues of growth for the fintech sector and has presented opportunities for mobile operators to expand services and generate additional revenue streams. By leveraging their existing infrastructure and customer data, operators can continue to create new value-added services for customers.
With the acceleration of mobile connectivity in Sub-Saharan Africa, the fintech industry is thriving and contributing to economic development, digital transformation, and financial inclusion in the region.
This remarkable synergy between mobile technology and fintech has the potential to drive lasting positive change across various sectors in Sub-Saharan Africa.
