Kenya Has Captured Only 8% of Fintech Investments in Africa between 2019 And 2023 – Report

A report by Nigerian market intelligence firm Stears, which specializes in African investments revealed that Kenya has captured only 8% of the fintech investments in Africa between 2019 and 2023. 

In the last five years, the East African country is reported to have been overlooked by fintech investors, causing it to trail behind Nigeria, Egypt, and South Africa.

Possible factors contributing to Kenya’s lower priority for fintech investment may stem from the flourishing green-tech sector, which has captured 45% of Africa’s clean-tech investments since 2019. 

Also, Safaricom’s near-monopoly in the Kenyan market, particularly its dominance in mobile money through the widely-used M-Pesa platform, poses a significant barrier for fintechs and banks seeking to challenge Safaricom’s entrenched position in consumer payments.

The telco which reportedly has a dominance in the mobile money wallets market, poses significant challenges for fintech companies seeking to enter the consumer market. Mpesa facilitates almost all mobile money payments in Kenya. 

Data from the Communications Authority shows that Mpesa has 98.4% of registered mobile money customers, leaving only 1.6% to the other service providers Airtel Money and Telkom’s T-Kash. The company has held nearly 75% of the mobile money market share in Kenya for nearly a decade and the country has the highest mobile-money usage rates in Africa.

This situation, as highlighted in the report, may deter investors from finding the consumer financial landscape attractive.

Safaricom’s stronghold in the consumer payment sector is projected to endure, as fintech companies are anticipated to shift their focus towards different sectors rather than engaging in direct competition. The report suggests that fintechs are likely to concentrate on other key user segments such as merchants, large enterprises, and traditional financial institutions.

To ensure continued relevance, the report highlights the importance of Safaricom partnering with financial institutions to offer sophisticated financial services such as insurance, pensions, and asset management.