The current funding landscape in Africa’s fintech sector is expected to result to more acquisitions that would be considered by existing startups according to the predictions for 2024 Sub-Saharan Africa Fintech Landscape released by the Co-Founder and Chief Executive Officer of Trade Lenda Limited, Mr. Adeshina Adewumi
In the report titled, The Future of Fintech in Africa, Five Predictions to Look out for in 2024, Adewumi predicted more acquisitions would be considered by existing startups and also the traditional banks and corporate seeking to leverage the strength and agility of the startups to consolidate on their offerings in the market.
Quoting a report, he said that African Fintech landscape witnessed 26 publicly announced acquisitions over the last two two years according to Tekedia , a whooping 270% growth from between 2019-2021 period. While this number can be considered few, this figure is from publicly made known acquisitions and also shows significant growth of the African landscape.
According to him, 2024 would bring in more consolidations of efforts among Fintechs and also between larger corporates and Fintechs to explore synergies. M&As still serves as a strategic tool to allow startups overcome the current funding landscape while also delivering returns for existing stakeholders.
Adewumi in his report revealed that the Africa’s fintech landscape in 2024, new funds and Angel investors would emerge to cushion the gaps experienced in 2023 funding across the continent.
He said, “The African landscape has delivered positive results return wise and impact, regardless of the overall seemingly negative news that clouds the positive impacts and results. The various exits, although few has opened up focus across the Sub-Saharan Africa region. Global accelerators, Angels and Venture firms have also included Africa focused lens to their funds.”
The Trade Lenda boss is equally optimistic that SME lending space would grow stronger in 2024 alluding to the fact that across Africa, Small and Medium Enterprise (SMEs) contribute to about 84% of the total jobs.
“Government and development agencies would be bullish in creating various policies to support more micro lending opportunities for the Small and Medium Enterprises (SMEs) so as to continue to enable them to create and sustain jobs across the continent. McKinsey report “ Fintech in Africa: the end of the beginning restates this position as new entrants and some existing B2B Ecommerce would envelope into a digital bank to further support SMEs with micro lending among others”, he stated.
While recalling that 2023 has shown the need to focus on customers, profitability, and stronger need for corporate governance structures across Fintechs and the overall financial service sector, the report indicated fintech would focus on customers and profitability over excessive growth.
He said: “If the growing cybersecurity threats is anything to go by and given the more active role the government agencies would play in 2024, it is only ideal for operators to pay more active focus on the user verification and engagements.”
The report however warned that “those who would remain would have to buckle up in terms of corporate governance structures and accountability, this has taken the back seat over the years but would and should now take the front burner entering into 2024.”
Sighting some reports, he predicted that active participation of Government and other regulatory bodies stating that “In Nigeria, the Federal Competition and Consumer Protection Commission (FCCPC) kicked off its clamp down on non-registered Fintechs classified as loan sharks in 2023, resulting in most being delisted and some under conditional approvals list. Companies like Trade Lenda, Sycamore and 190+ others however made the fully unconditional approved list here .”
