Unlike elsewhere in the world, in Africa, the biggest market is an unserved market. Around 330 million adult Africans, approximately 80% of the continent’s population, lack access to formal financial services. The vast majority of potential customers are as yet unclaimed, though they are getting switched on very rapidly.
In developed economies, fin-tech is disrupting traditional banks and financial institutions, but, in most of Africa, it is disrupting nothing at all because there is nothing there for it to disrupt. In developed countries, the formal banking system is very widespread, with physical bank branches available in every city, town and village. This is not the case in most of Africa, where it has not been financially viable for banks to offer last-mile services. South Africa’s highly-developed financial services sector is the exception rather than the rule.
Fin-tech startups in Africa are now building a whole new infrastructure rather than disrupting an existing one. Mobile wallets are functioning as bank accounts so there will never be a need for most Africans to adopt traditional banking services and these mobile wallets are then creating access to other financial services, such as insurance and loans.