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Fintech Funding in Africa: Regional Breakdown

by Kevin Mwangi June 26, 2025, 1:59 am 588 Views

Africa’s fintech industry is booming, with revenues projected to soar from $10 billion in 2023 to $47 billion by 2028. Here’s a quick overview of the key regional trends driving this growth:

West Africa: Nigeria leads with $400M of the $587M raised in 2024. The region excels in digital payments but faces regulatory challenges.
East Africa: Dominated by Kenya, which raised $638M in 2024. Mobile money, led by M-Pesa, is the backbone of its fintech ecosystem.
Southern Africa: South Africa remains the main player, contributing 99% of regional funding, but overall funding dropped by 36% in 2024.

Quick Comparison

Region	2024 Funding	Strengths	Challenges
West Africa	$587M	Digital payments, Nigeria’s leadership	Regulatory inconsistencies
East Africa	$725M	Mobile money dominance, Kenya’s growth	Limited diversification
Southern Africa	$459M	Mature financial sector	Declining funding, slow growth

Despite regional disparities, fintech dominates Africa’s tech funding, accounting for 46% of all startup investments by Q1 2025. Growth opportunities remain vast, particularly in underserved regions like Francophone West Africa.

What to Expect in 2025 |Africa Fintech Pulse | Episode One

1. West Africa

West Africa continues to lead the charge in Africa’s fintech scene, with Nigeria at the forefront of the region’s impressive performance. Despite challenges across the continent, the area remains a hotspot for investors.

Funding Volume

In 2024, West Africa raised $587 million in startup funding, with Nigeria alone accounting for nearly $400 million of that total. During Q1 2025, Nigeria secured about $100 million, solidifying its position as one of Africa’s top three startup markets alongside Kenya and South Africa.

This growth is part of a steady upward trend. Even with global funding conditions tightening and a broader continental decline – from $2.4 billion in 2021 to $1 billion in 2024 – West Africa has managed to sustain strong investment levels. This resilience sets the stage for exploring the key markets driving the region’s fintech boom.

Key Markets

Nigeria remains West Africa’s fintech powerhouse, leading in both deal volumes and funding. Its large population, rising smartphone use, and expanding middle class create fertile ground for digital financial services. With a projected annual growth rate of 12% through 2025, the country offers ongoing opportunities for expansion.

Ghana is emerging as a strong secondary market. Mobile money usage surged by 63% in 2023, highlighting rapid digital adoption. The financial services sector in Ghana is expected to grow at an impressive 15% per year until 2025, making it a magnet for fintech investment.

Meanwhile, francophone West Africa is gaining attention as an emerging player. Markets like Senegal, Côte d’Ivoire, and Togo have seen venture capital funding grow eightfold between 2021 and 2024 compared to the 2012-2020 period. Fintech accounts for 31% of total funding in this subregion, connecting an estimated 30 million people to formal banking services.

"The fintech revolution in Africa is not just a trend; it’s a transformative force that is reshaping the continent’s financial landscape." – Mayowa Kuyoro, Partner at McKinsey, Lagos

Notable Trends

West Africa’s fintech sector is evolving, shifting from a focus on rapid growth to prioritizing sustainable profitability.

Wave‘s success in Senegal is a standout example. Within just three years, it captured nearly 70% of the mobile money market. Additionally, the region has seen a rise in mergers and acquisitions as companies aim to scale beyond national markets. For instance, in 2024, Paystack acquired Brass, a Nigerian SME-focused business banking startup.

Traditional banks in Nigeria and Ghana are also adapting, launching dedicated fintech divisions to tap into the growing digital payments market.

Challenges and Opportunities

While the fintech sector in West Africa is thriving, it faces challenges such as navigating diverse regulatory environments and managing the stability of the CFA franc in francophone markets. These factors highlight the importance of strategic flexibility.

With the rapid rise of digital adoption, cybersecurity has become a critical concern. Fintech companies must invest in robust security systems to maintain customer trust and meet evolving regulations. At the same time, the emergence of open finance initiatives is opening doors for collaboration between fintech firms and traditional banks, fostering innovation and lowering entry barriers for new startups.

Despite these challenges, the region’s fintech sector is buoyed by a young, tech-savvy population, increasing smartphone penetration, and government-backed digital transformation efforts. With a large unbanked population, the market potential for fintech solutions in West Africa remains vast.

2. East Africa

East Africa has solidified its position as a leader in Africa’s digital transformation, becoming a major hub for funding and innovation. For the second year in a row, the region has attracted more investment than any other on the continent, with Kenya emerging as a fintech powerhouse.

Funding Volume

In 2024, East Africa pulled in $725 million in funding, making up about 33% of all funds raised across Africa. This marked a noticeable lead over West Africa, which secured $587 million, signaling a shift in where investors are focusing their attention.

Kenya dominated the funding scene in the region, accounting for $638 million – a staggering 88% of East Africa’s total and 29% of all funding across Africa. The momentum was particularly strong in early 2024, when Kenya secured $482 million in venture capital just in the first quarter, followed by another $100 million in Q1 2025. These numbers highlight Kenya’s growing role as the region’s fintech hub.

Key Markets

Kenya is the heart of East Africa’s fintech scene, often referred to as the "Silicon Savannah." The country has built a robust digital payments ecosystem, driven by mobile money innovations and a tech-savvy population.

M-Pesa continues to be a cornerstone of Kenya’s digital economy. By 2024, the platform was processing over 61 million transactions daily and serving more than 50 million active users in Kenya alone. What started as a simple money transfer service has now expanded into savings, lending, and merchant payment solutions.

The digital payments market in Kenya is expected to grow at an annual rate of 14.1% between 2024 and 2028, reaching a projected value of $14.54 billion by 2028. Currently, more than 83% of Kenyan adults have access to formal financial services, largely through digital platforms. The country is also home to 102 fintech companies as of 2023, making up 15% of Africa’s fintech startups.

Notable Trends

With increasing investment, East Africa’s fintech landscape is evolving. While mobile money remains a cornerstone, services like card payments and digital banking are gaining popularity, especially in urban areas.

Interestingly, fintech companies in Kenya secured just 13% of equity funding in 2024, a significant drop from over 40% in prior years. This shift indicates that investors are exploring other sectors, such as cleantech, while many fintech startups are turning to debt financing instead.

Early-stage funding trends are mixed. Seed deals averaged $1.6 million in 2024, up 26% from the previous year. However, Series A funding saw a decline, with deal sizes dropping to $8.7 million in 2023 from $15 million in 2022.

"True ecosystem ownership starts with local investment. While international capital can accelerate growth, it often lacks a deep understanding of local dynamics and on-the-ground realities."
– Marge Ntambi, Venture Partner at Benue Capital

Challenges and Opportunities

Scaling remains a significant challenge for East African fintech startups. Only about 5% of seed-funded startups manage to reach Series A funding, which is 85% lower than the global average. This creates a bottleneck, limiting growth opportunities for many companies.

Investors have become more selective, focusing on startups with strong financial performance and clear profitability plans. In 2023, successful Series A fintech companies demonstrated gross margins exceeding 50%, setting a high bar for newcomers.

Despite these challenges, opportunities abound. The Nairobi Securities Exchange provides alternative capital-raising options through its Growth Enterprise Market Segment (GEMS). Additionally, open finance initiatives are gaining traction, supported by progressive regulations that encourage innovation.

Regulators in East Africa have played a key role in balancing the interests of traditional banks and mobile network operators. This has created an environment where innovation thrives without compromising financial stability.

Mobile payments now make up nearly 70% of digital transactions in some East African countries. Yet, there’s still room for growth in areas like digital lending, insurance, and cross-border payments, as a young, tech-savvy population continues to embrace new financial services.

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3. Southern Africa

While East and West Africa have seen strong growth in fintech funding, Southern Africa is navigating a different path. In 2024, the region faced notable challenges, contrasting sharply with the upward trends in other parts of the continent.

Funding Volume

In 2024, fintech funding in Southern Africa dropped by 36%, a stark contrast to East Africa’s $725 million and West Africa’s $587 million. South Africa took the lead in the region, contributing a massive 99% of the total funding. However, despite South Africa’s dominance, the region as a whole struggled to keep pace with Africa’s top-performing fintech markets, highlighting the broader funding slowdown across the continent.

Challenges and Opportunities

Southern Africa’s fintech ecosystem faces several hurdles. Regulatory complexities, cybersecurity issues, and low levels of digital literacy remain significant obstacles. Additionally, a general reluctance toward entrepreneurial risk in South Africa has limited the growth of startups.

"When you look at South Africa and the rest of Africa, a lot of the big players are coming under threat." – Chantal Maritz, Partner and Payments Transformation Leader, PwC in South Africa

That said, the region also has untapped potential. Cities like Cape Town and Johannesburg boast a mature financial sector, creating fertile ground for fintech innovation.

"Commercial banks or big banks do not have the capability to serve middle income or small business." – Uzoma Dozie, CEO of fintech, Sparkle

This gap in traditional banking services offers fintech companies a chance to step in with tailored solutions for underserved groups, paving the way for future growth in the sector.

Key Markets

South Africa remains the powerhouse of Southern Africa’s fintech scene, generating around 40% of Africa’s financial services revenue and operating under a structured regulatory framework. The South African fintech market, valued at $7.08 billion in 2023, is forecasted to nearly double to $15 billion by 2033, with a steady annual growth rate of 7.70%. Financial inclusion in the country is high, with about 90% of the population having access to banking services, leaving only 10% unbanked.

Mauritius is also carving out a niche as a secondary market, offering regulatory stability and serving as a strategic hub for companies aiming to expand across the region.

Notable Trends

Southern Africa’s fintech sector is undergoing exciting transformations. TymeBank, for instance, made history as the first digital bank in Africa to achieve profitability, serving over 10 million customers. In December 2024, Tyme Group reached unicorn status after raising $250 million in capital.

Funding strategies are diversifying, with companies exploring debt financing, government-backed initiatives, and corporate venture capital. Key investment areas include digital payments, as well as emerging technologies like AI, blockchain, and cloud computing. Regulatory developments are also placing Southern Africa in a leadership position, with 75 institutions licensed as Crypto Asset Service Providers and the implementation of open finance policy frameworks.

The Buy Now, Pay Later (BNPL) market is another area of rapid growth. In 2024, the BNPL market in Africa and the Middle East was valued at $15.5 billion, with South Africa standing out as a leading player. By 2029, this market is projected to grow to $33 billion, reflecting an annual growth rate of 16.1%.

Regional Comparison: Strengths and Weaknesses

Building on the earlier regional analyses, this section compares the standout features and persistent hurdles of each market. Every region brings its own fintech advantages and obstacles, shaping the flow of funding across the continent.

West Africa continues to lead in deal volume, with Nigeria reclaiming its spot as Africa’s top venture capital hub in 2024. The country secured $520 million in equity funding, an 11% increase from the previous year. Nigeria’s dynamic fintech ecosystem is the driving force behind West Africa’s success, even as regulatory inconsistencies and infrastructure limitations remain challenges.

East Africa has shown resilience, with fintech investment doubling to $16.5 million in Q2 2024. Kenya, the region’s anchor, raised $221 million in equity funding in 2024. However, this marks a 34% drop compared to the previous year. The region continues to benefit from the widespread success of mobile money, with M-PESA now serving over 51 million customers as of July 2024. That said, East Africa faces hurdles in expanding its fintech offerings beyond mobile payment solutions.

In Southern Africa, South Africa remains the dominant player, raising $459 million in equity funding in 2024. However, this represents a 16% decline from the previous year. The region benefits from a well-established financial sector and a strong regulatory framework, but the drop in funding highlights difficulties in sustaining innovation and growth momentum.

The funding landscape reveals clear differences in deal sizes and investor sentiment across regions. In the first half of 2024, the average deal size fell to $4 million from $10.5 million in 2023, with the total number of deals dropping by 30% year-over-year. West Africa maintained higher deal volumes, while East and Southern Africa saw more targeted, smaller-scale investments.

The table below summarizes the strengths and weaknesses of each region:

Region	2024 Funding	Key Strengths	Major Weaknesses
West Africa	$520M (Nigeria)	Vibrant fintech ecosystem; deal volume leadership	Regulatory inconsistencies; infrastructure gaps
East Africa	$221M (Kenya)	Mobile money dominance; growing investor interest	Limited diversification; scaling challenges
Southern Africa	$459M (South Africa)	Established financial sector; strong regulatory framework	Declining funding; limited growth momentum

Regulatory frameworks are a crucial factor in shaping investor confidence. Across Africa, weak liquidity and inconsistent regulations in capital markets have posed challenges. However, governments in East and Southern Africa are gradually improving regulations to enhance financial security and consumer protection, which is helping to rebuild investor trust.

"There’s a credibility gap. Investors are not only cautious due to past IPO performance but also because fintechs themselves haven’t built a track record in public transparency and regulatory scrutiny." – Chuba Ezenwa, Managing Director, Head of Investment Banking Sub-Saharan Africa at Bank of America

Despite regional differences, four countries – Nigeria, Egypt, Kenya, and South Africa – remain dominant, accounting for 67% of Africa’s 2024 equity funding, though this is down from 79% in 2023. Among these, Nigeria and Egypt stand out as the most dynamic, representing 47% of all seed-stage deals and funding on the continent. Kenya, on the other hand, appears to be losing ground within the group.

Fintech’s prominence in Africa’s tech ecosystem has grown significantly, securing $1.4 billion in equity funding in 2024. This accounts for 60% of total tech funding, up from 37% in 2023. West Africa has benefited the most from this growth, while Southern Africa has struggled to maintain its previous funding levels. Notably, multi-region deals are attracting the largest investments, signaling a preference among investors for pan-African strategies over single-market approaches.

These regional disparities underline the importance of strategies that connect markets across Africa to address funding challenges effectively.

Conclusion

Africa’s fintech scene showcases a vibrant and evolving ecosystem, with each region playing a critical role in shaping the continent’s financial future. Fintech has become the dominant force in Africa’s tech sector, attracting the majority of funding and gaining remarkable momentum. This growth sets the stage for exploring the unique strengths and challenges of the various regions.

West Africa leads in deal activity, East Africa continues to set standards with mobile money innovations like M-Pesa, and Southern Africa offers a stable regulatory environment, even as its funding growth slows. These regional dynamics collectively position Africa as a rising global leader in fintech.

The continent’s fintech potential remains immense. With over 650 million smartphone users, the infrastructure for digital adoption is firmly in place. McKinsey projects that African fintech revenues could increase eightfold by 2025 if other markets achieve the same penetration levels as Kenya.

Key trends are driving this momentum. Mobile payments now account for nearly 70% of digital transactions, while alternative lending models and Buy Now, Pay Later (BNPL) services are gaining ground . Open finance initiatives are fostering innovation, and embedded finance is integrating financial services into existing platforms. These developments highlight the structural strengths that continue to attract significant investment.

"The question is no longer whether Africa’s fintech will reshape the global financial landscape because it already is." – Akim Benamara, TechAfrica News Editor

While investor confidence remains focused on established markets, Francophone Africa is emerging as the fastest-growing subregion, signaling fresh opportunities beyond the traditional hubs.

For stakeholders, navigating this landscape means addressing infrastructure gaps, regulatory inconsistencies, and talent shortages while capitalizing on the continent’s unique opportunities.

"Funds should consider Africa’s challenges and opportunities and should not apply the precise models used in the West." – Barry Ryan, Africa-based fintech investor

Africa’s diverse regional strengths underscore its growing prominence as a fintech powerhouse. With a young, tech-savvy population and increasing investor interest, the sector is well-positioned to drive transformative change. As of March 2025, eight of Africa’s nine unicorns are fintech companies, reflecting the sector’s ability to create market-defining businesses.

For the latest updates and in-depth analysis of these trends, Tech In Africa offers daily insights into the startups, entrepreneurs, and innovations shaping the continent’s digital future. Staying informed about regional and cross-border developments is key to understanding Africa’s rapidly evolving fintech landscape.

FAQs

What challenges do fintech companies in West Africa face, and how are they overcoming them?

Fintech companies in West Africa are navigating a range of hurdles, from complicated regulatory frameworks and insufficient infrastructure to restricted access to funding and high operational expenses. These challenges often act as roadblocks, slowing down both growth and innovation in the region.

To tackle these obstacles, many fintech firms are focusing on building up digital infrastructure and advocating for simplified, harmonized regulations across national borders to foster a more cohesive market. They’re also tapping into venture capital and impact investment opportunities to secure much-needed funding. On top of that, mobile technology is proving to be a game-changer, enabling companies to extend financial services to underserved communities and sidestep traditional banking limitations.

What new trends are shaping East Africa’s fintech sector beyond mobile money?

East Africa’s fintech scene is evolving at a fast pace, branching out from its mobile money roots into areas like digital lending, open finance, and the integration of AI and automation to enhance financial services. Kenya, widely regarded as a leader in the region, is at the forefront of this progress. Nairobi, in particular, is gaining attention as a thriving hub for fintech innovation.

Some of the standout trends include the emergence of open finance regulations, lending platforms designed to address local challenges, and growing collaboration through regional fintech events. These advancements are not only boosting financial inclusion but also creating a dynamic environment for both startups and investors.

What are the main reasons for the drop in fintech funding in Southern Africa, and what growth opportunities remain?

The drop in fintech funding across Southern Africa can be traced back to a mix of regional and global economic pressures. Factors such as shaky investor confidence and overall economic instability have played a major role. In 2023, fintech investments in the region took a sharp hit, falling nearly 50% compared to the previous year. Even South Africa, which is considered the region’s fintech leader, has struggled with challenges like limited funding options and a lack of skilled professionals.

However, the region still shows plenty of promise for fintech growth. Opportunities lie in areas such as the growing use of mobile money, the expansion of digital financial services, and regulatory changes aimed at spurring innovation. With a significant portion of the population still unbanked and digital transformation continuing to gain momentum, Southern Africa remains well-positioned for future developments in fintech.