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Unwrapping the African FinTech Product Suite

Africa is said to be the FinTech innovation capital of the world, and when looking at mobile money and the impact this has had on the continent, it’s clear to see why. Innovations coming out of this market have positioned FinTech as an enabler and catalyst for financial inclusion and provided many with access to mobile banking, microloans, insurance and more through Fintech Product Suites. With the eye so firmly on innovation and new technology trends, we need to ensure that we don’t close the door on those who don’t have access or who cannot afford to access new FinTech. Fintech product suites and technology needs to be adapted for audiences with different socio-economic standings depending on their needs, affordability and access. We examine this in more detail below.

The FinTech Landscape in Africa

For us to discuss the impact of FinTech in Africa, we need to define what it is. FinTech refers to innovative financial technology that digitizes traditional financial services. FinTech often comprises software, algorithms, and applications for both computer and mobile use. This technology aims to open and expand the financial services value chain by enhancing financial inclusion and improving service offerings.

The FinTech landscape in Africa is different from the rest of the world, especially in terms of what technology is available and how it is being used. This is primarily due to the access and connectivity available in more developed countries, like 5G. Countries like the United States of America and China are seeing an increase in the use of FinTech relating to blockchain and cryptocurrency, insurance, stock-trading, consumer banking, payment gateways as well as mobile payments.

In Africa, the FinTech landscape primarily revolves around mobile money technology.  According to McKinsey, just over half of the 282 mobile money services operating worldwide are located in Sub-Saharan Africa, with an estimated 100 million active mobile money accounts, which accounts for 1 in ten African adults. 

The growth in mobile services, access, and connectivity, has played a significant role in this. This growth has been detailed in the GSMA Mobile Economy Sub-Saharan Africa 2020 report, which states that there are an estimated 477 million people in Sub-Saharan Africa subscribed to mobile services, accounting for 45% of the population. It is estimated that the mobile money market in this region will have half a billion mobile subscribers in 2021, 1 billion mobile connections in 2024, and 50% subscriber penetration by 2025. This expected growth can also be attributed to the rise of smartphone adoption, which has been made possible through the availability of cheaper devices that allow low-income consumers to gain access to these services. GSMA also expects the number of smartphone connections in Sub-Saharan Africa to almost double and reach 678 million by the end of 2025, which is an adoption rate of 65%.

From the above, it is clear to see that the adoption of mobile is on the rise in a big way, as is the use of smartphones. This enhances the growth opportunity for FinTech solutions in this market. But when looking at the numbers, there is still a large percentage of people in Africa who are not connected and don’t have access to smartphones. The question remains of how we include this large group while still being innovative and answering the needs of those who do have connectivity and can afford the full FinTech product suite.

Adapting FinTech to be more inclusive

When looking at the African continent in the context of inclusion, it is essential to note that there are vast differences in the socio-economic standings of people in and across different African countries, with Living Standards Measures (LSM) ranging from 1 to 10. The economic disparity between these different segments has a significant impact on FinTech capabilities. For example, those who feature in the LSM 8-10 segments can afford smartphones, have access to Wi-Fi, have bank accounts and use online banking etc. Those in the lower LSM segments often don’t have this kind of access, connectivity and are usually unbanked, but the customers in this sector still do have access to mobile phones. This is an opportunity that is often overlooked when looking at the FinTech product suite.  

How does one tap into the potential of both segments and ensure inclusivity? The answer lies in adapting FinTech products and solutions to talk to the needs of all consumer segments. This sounds like a monumental task, but the technology is there and available. It is a case of refining the FinTech Product Suites to enhance functionality, access and financial inclusion.


FinTech Product Suite Balancing Act

There are several ways to look at answering to the needs of different FinTech product suits for segmented groups across the continent. These include the points mentioned below.

Look beyond payments and tailor-make offerings

Different LSM segments require unique services and offerings, which is why there is a need to look at offering tailor-made FinTech based packages. For example, those in a higher income bracket are looking for solutions that enhance efficiency like the use of mobile banking apps, e-commerce, trading, buying insurance, international payments, etc. 

For those in a lower income bracket, the needs are slightly different. They relate to being able to make non-bank-related mobile payments, buying airtime, cross-border payments, paying for utilities, getting credit clearance, being able to get a microloan, etc.  The technology available today allows for the creation of different packages that speak to each of these segments’ needs. Many would ask, would it not be more profitable to target the higher income brackets as they have more money?  This is a popular approach taken by many businesses, but there is much more competition in this segment which makes sales challenging to acquire. 

With the lower-income segment, there is volume and a real potential for significant growth, but this requires innovative thinking and sometimes a simpler look at what the need is and what technology can be used. Some FinTech startups have even started looking past income segments and looked at cultural trends in different countries. One such example is Stokfella, which has taken the concept of a popular South African community-based savings and banking system, called Stokvels, and turned it into a successful app that acts as an online “Club Savings Account”. This is an excellent example of tapping into a segment and innovatively using FinTech.

Improving data availability for FinTech

FinTech in Africa is still far away from 5G and in many ways behind the rest of the world in terms of technology use. Many of the high-income brackets do have connectivity and access to Wi-Fi and data, but many of the lower-income segments do not. An important note to make is that even if lower-income segments had access to the internet, Wi-Fi, etc. the likelihood is that they would not be able to afford it. Connectivity is not only about bandwidth but affordability as well. This poses a challenge for FinTech in terms of inclusion. 

But the good news is that there is still functional technology that can be used to facilitate financial inclusion in these segments. This includes the Unstructured Supplementary Service Data (USSD). USSD is a great mobile banking solution as it does not require an internet connection or data to work. It works on any mobile phone, operates globally, and is very economical. By using this technology, you can offer FinTech solutions that enhance financial inclusion but more simply and cost-effectively.

Minimizing capital risk with more effective targeting

Connectivity is a significant challenge for many consumers across Africa as the infrastructure and coverage are just not available. According to GSMA, more than 40% of the population in low and middle-income countries will remain offline in 2025. This is primarily related to the cost of installing this infrastructure without a guarantee of a return on investment, which is a considerable risk for Mobile Network Operators. But this is also a catch 22 for FinTech, if customers cannot connect, they cannot use the services. A solution to this is to look at practical and effective business models that provide connectivity but that are profitable. For example, looking beyond voice and messaging services and creating solutions such as providing hot spots, but that has a transaction fee built into the service to make sure the service offers a return.

Enabling Sophisticated Customer Profiling

There is a need for more sophisticated customer profiling when developing FinTech products. Many of the customer profiling models follow a yes or no application, as in yes, this customer fits our target audience or no, they do not. This is not effective as it does not take into account other valuable information that could provide insight into much-needed FinTech solutions that have the potential to enhance revenue and profitability. In Africa, profiling needs to look beyond access or connectivity and rather look at consumer behaviour and actions. 

For example, one smartphone may be used by several different consumers, they then may swop out their sim cards depending on where they are, the coverage available, and what their needs are. According to GSMA elements that impact this and act as barriers include the affordability of handsets and data as well as digital literacy and skills needed to operate FinTech solutions. 

Each of these elements should be considered when developing FinTech products. Sophisticated customer profiling also enhances your marketing and communication efforts as you can segment audiences and tailor messages, packages, and solutions to suit their needs. This provides you with a more cost-effective and tailored approach.



FinTech in Africa has immense potential that is only going to increase over the next few years. The innovative FinTech being developed opens up a world of opportunity, especially where mobile money is concerned. Although there is a rise in smartphone use, there are still millions that rely on cell phones with numeric keypads. There is also still a large portion of consumers who do not have connectivity because of affordability. These elements need to be considered when developing FinTech product suites to ensure that financial services are available and open to everyone no matter what their social-economic standing is. 

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