Africa Fintech Hub
Online one-stop shop to strengthen fintechs across Africa.
The African Development Bank, through the Africa Digital Financial Inclusion Facility (ADFI), has signed a grant agreement of $525,000 with the Africa Fintech Network (AFN), to launch the Africa Fintech Hub, an online portal that will provide a one-stop shop for all fintech activities in Africa.
With technical and financial support from the Africa Digital Financial Inclusion Facility (ADFI), the Africa Fintech Network will host and manage the African Fintech Hub, a digital platform that seeks to enable fintech associations across Africa to pool resources and knowledge, strengthen relationships and partnerships and showcase the works of fintechs in Africa, including female-led or owned businesses.
The Hub will be delivered via a strategic partnership between AFN and Cenfri, with Cenfri providing the technical support in innovations related to the Hub, research, and associated knowledge creation and management initiatives.
Launched in April 2023, the project develop the Africa Fintech Hub with the following overall outcomes:
- A needs assessment report (that integrates gender lens) and identifies needs and opportunities for female-led or female-owned fintechs;
- A functional digital hub that is actively used by the association members;
- Increased visibility on Africa fintechs’ profile and activities; and
- Increased number of investors and partners who engage via the portal.
This project addresses many of the Sustainable Development Goals (SDGs) and the African Development Bank’s High 5 priorities to contribute to greater economic growth, reduce poverty, support youth economic empowerment and gender inequality.
It is estimated that at least 25 associations and 70% of their members will actively use the knowledge assets. At least 10 female-led or owned fintechs and 10 investors will participate in events leading to improved partnerships.
Africa Digital Financial Inclusion Facility (ADFI)
This initiative is supported by technical support and a grant of USD 525,000 from the Africa Digital Financial Inclusion Facility, known as ADFI. The project, which aims to strengthen the fintech sector, furthers ADFI’s work to leverage technology to contribute to closing the financial inclusion gap, boosting the MSME sector and creating employment across the continent.
ADFI is a multi-donor fund, hosted by the African Development Bank, with the mission to address systemic barriers to the uptake, growth and use of digital financial services and advance financial inclusion through catalytic and strategic investments throughout Africa. For more information, visit www.adfi.org.
NEWS & EVENTS and RESOURCES
NEWS & EVENTS
- AFDB GRANTS $525,000 FOR AFRICA FINTECH HUB PROJECT (youtube.com)
- AFF – Video of session mentioning project
RESOURCES
- Context
- Needs assessment report
- Blogs/articles/ newsletters
- Case study
CONTEXT
Africa is home to an estimated 573 fintech start-ups, 200 of which raised $350 million in the first quarter of 2020[1]. Fintechs have played a critical role in extending digital financial inclusion across the continent through and beyond COVID-19 and in enabling Africa’s transition into a digital future under the African Continental Free Trade Area (AfCFTA). Despite the potential of the fintech sector to contribute to digital financial inclusion, the African sector significantly lags behind those in other regions like Latin America and South-East Asia.
A survey of 100 fintechs across 17 African countries[2] by Cenfri and AFN, under their African Fintech Radar initiative, found that African fintechs experience an array of challenges that impact access to markets, raising funding, navigating regulation, and developing products that align with the needs of financially underserved market segments, thereby undermining their contribution to creating a more inclusive digital finance ecosystem.
There are many initiatives focused on providing technical assistance and acceleration support to fintechs. For example, in 2019 alone, there were nearly 650 innovation hubs supporting Africa’s innovators[3]. However, investors still focus on established fintech markets and most venture capital investments in Africa are typically smaller than in other markets, often targeting the seed stage compared to growth stage[4]. Fintechs also struggle with knowledge gaps of how to engage regulators and lobby for policy and regulatory framework changes that impact their work.
A strong fintech sector has the potential to contribute to economic growth but also to increase opportunities for job creation. A recent report from McKinsey showed that, between 2020 and 2021, the number of tech startups in Africa tripled to around 5,200 companies, with just under half of these being fintechs. The value of the fintech market in Africa has reached that of global market leaders with estimated revenues of around USD 4 billion to 6 billion in 2020 and average penetration levels of between 3 and 5 percent (excluding South Africa).
In addition, a recent IFC study estimates that over 230 million jobs in sub-Saharan Africa will require digital skills by 2030, creating opportunities in adjacent industries too, notably training.
Fintechs have played a critical role in extending digital financial inclusion across the continent through and beyond COVID-19 and in enabling Africa’s transition into a digital future under the African Continental Free Trade Area (AfCFTA).
However, despite the potential of the fintech sector to contribute to digital financial inclusion, the African sector significantly lags behind those in other regions like Latin America and South-East Asia.
A survey of 100 fintechs across 17 African countries by Cenfri and AFN, under their African Fintech Radar initiative, found that African fintechs experience an array of challenges that impact access to markets, raising funding, navigating regulation, and developing products that align with the needs of financially underserved market segments.