According to a recent report, financial technology will be worth $305 billion by 2025. A frontier market is one that is also very promising for new products and services. That consumers prefer the lower search and implementation costs related to bundled services is not specific to the African market in the U.S., over 50% of product searches start on Amazon, where 44% of all online purchases occur. The M-Pesa service provided by Safaricom sparked a tech boom in Kenya. Farmers can obtain loans by receiving real-time credit reports from FarmDrive. The continent has a plethora of talented and inventive individuals, and there is enormous scope for new businesses to emerge. In an interview with John Kodres, director of the Center for Internet and Society at the Brookings Institution, he stated that the Biden administration will face some difficult choices when it comes to regulating social media-driven financial innovation. Today, Kenyans use technology to pay bills, send and receive money, buy insurance, and invest in the stock market, among others. The financial technology industry is a revolutionary and rapidly expanding field that is transforming how people do business. The banking industry in Kenya is governed by the Companies Act, the Banking Act, the Central Bank of Kenya Act and the prudential guidelines issued by the Central Bank of Kenya (CBK). It provides a merchant portal enabling businesses to provide buy now pay later options to the end customers. While its arguably just the latest update to the millennia-old evolution of credit, contracts, and banking, FinTech was one of the most explosive fields of the past decade. These key fintech developments have led to its recognition as the Silicon Savannah. Because interest rates are at historically low levels, there is a high demand for investments that will pay off in the long run. The advent of contemporary credit in the U.S. via the Diners Club Card in the early 1950s was a major breakthrough: It represented a much more efficient means of payment that also doubled as a seamless way to extend new credit to consumers. Together with our partner network we support Swiss SMEs in their international business. Sompo Holdings, Greycroft, Plug and Play Tech Center and 19 Other Investors [Investor Details], Software for cross-border remittance and forex management. The majority of fintechs are located in North America and Europe, with a growing presence in Asia and other regions. Africa is host to 33 of the worlds 47 least developed countries by the U.N.s categorization. In Kenya and Africa in general, investors recognise BitPesa for its work in facilitating cost-effective and faster cross-border transactions using blockchain settlement. Africa is regarded as the worlds second-fastest growing payments and banking market after Latin America, according to this McKinsey study. Cars DBSA, Greycroft, SBI Investment and 5 Other Investors [Investor Details]. To stay competitive, U.S. banks and FinTech companies need to study the factors enabling these successes abroad and figure out how they can keep pace. Investec sits in fourth place with seven per cent, financial management in fifth place at six per cent and insurtech in sixth at six per cent as well. Reimagining these forces, with lessons learned from budding leaders, will be vital for keeping up in the wave of innovation to come. On a side note, the telecom Safaricom is now estimated to contribute to five per cent of Kenyas gross domestic product (GDP) according to Harvard Business Review. These lessons would serve banks well, but non-traditional financial players have just as much of an opening to get involved in the U.S. As WeChat went from social network to money management service, and as Equity went from bank to mobile network, the lateral moves across industries that modern technologies allow should be explored by firms of all stripes. The platform uses satellite data, agronomic machine learning, remote sensing, and mobile technology for credit assessment. Equitel, a hybrid firm, was able to flourish by borrowing consumer trust from the long-established brands Equity Bank and Airtel. Alongside other fintech hubs in the region, namely Egypt, South Africa and Nigeria; Kenya now joins the circle of being one of the major four fintech hubs in Africa. In terms of its fintech subsector, according to Tellimer, the lending subsector commands the most at 30 per cent, followed by payments at 27 per cent in second place, and in third place, blockchain at 15 per cent. For example, the CBK has reduced the minimum capital requirements for fintechs, making it easier for them to set up shop. According to the Diaspora Remittances Survey, this amount surpassed the previous record of $3.094 billion set in 2020. With a growing number of fintechs and a supportive regulatory environment, the Kenyan fintech industry is set for continued growth in the coming years. On the other hand, Kenyas increased deal flow is indicative of the growing VC funding in Africa. Targeted members are e-wallet providers, banks, payments service providers, and many more. The Big Deals data shows that Africa had by the end of June raised $3 billion, doubling what it had raised in the same period last year despite this being a drop in the ocean when compared to other regions across the globe. To survive as a startup in the crowded world of well-funded and omnipresent giants, the entrepreneur must understand both established finance and technology companies. It aims to transform Kenya into an industrialising, middle-income country providing a high quality of life to all its citizens. Since 2016, the cohort has raised approximately $73.8 billion in aggregate funding across over 1,200 deals. Businesses can use Pesapals POS to simplify the payment process, reconcile reports, and find it easier to make settlements. Based on the quick adoption of the mobile money services, banks, venture capitalists, financial companies and governments have quickly pivoted towards digital financial services. In 2021, 154 fintech startups were located in South Africa. This number has been growing rapidly in recent years, as the industry has become more popular and accessible. This site uses Akismet to reduce spam. The IMF cited estimates of over $50 billion invested in the field during the first half of the 2010s, with triple-digit year-over-year growth being the norm. Through the products and services they offer, Kenyans can transact online by buying shares, sending and receiving money on their mobile devices, invest in cryptocurrencies, and borrow loans. Kenyans made over 36.6 billion transactions per day, valued at over $15 billion USD. The company offers unsecured loans and approves them within 24 hours. If the sector overall can reach similar levels of penetration to those seen in Kenya, a country with one of the highest levels of fintech penetration in the world, we estimate that African fintech revenues could reach eight times their current value by 2025 (Exhibit 1). The fintech sector in Africa is being recognized as one of the best sectors for growth by other industries as well. The majority of these fintechs are focused on providing mobile money and payments solutions, although there are also a number of startups working on innovative solutions for lending, savings, and other financial services. Strengthen your fluency in financial statements. Over the past decade, however, China has become the global leader: Powered by smartphones and social apps, China has used remote payments and the digitization of money management to build a steady vehicle of financial inclusion. Kenya is becoming a hub for fintech companies that want to provide faster and more affordable financial services. While the U.S. produced the first major wave of innovation in this sector, it has fallen behind as firms and consumers have reached the innovative doldrums of good enough. But by studying where FinTech has gone, and where its going, U.S. companies can still catch up. U.S. leadership in the FinTech space, led by the banking sector and other traditional financial institutions, continued through the 1990s with the proliferation of the internet and the birth of online banking. HBR Learnings online leadership training helps you hone your skills with courses like Finance Essentials. Tapfuma Musewe Kyle Hiebert July 25, 2022 Illustration by Sarah Hanson |, Digital wallet for cross-border money transfers. It is also creating a mass of technology-based solutions and products for those that do not have access to conventional financial services. It allows to send and receive Bitcoins and fiat currencies through bank accounts and wallets. No. Parent company Equity Bank collaborated with international telco Airtel to give users a product coming from two longstanding companies. The advantage is that one does not need to have a bank account to complete those transactions. Young FinTech firms, on the other hand, offer all the agility but come without the decades of built-up trust. As the top VC investment destination in Africa last year, Nigeria raised nearly $1.8 billion, which is triple the funding Kenya secured. Kenyas growth in VC funding was buoyed by an increase in the number of deals and mega-rounds which are deals that are equal to or exceed $100 million. Increasing competition from fintechs. Through the use of cryptocurrencies, people in Kenya can send money instantly to people in other countries without incurring high remittance costs. Read through and get a revelation of the Kenyan fintech industry. Eclectics has implemented ICT systems in over 20 countries and with ongoing projects in Botswana, Zambia, Ethiopia, Southern Sudan, Cameroon, Gambia, Ghana, Malawi, Rwanda, Burundi, Tanzania, Uganda, and Kenya. We would be doing Kenya an injustice if we failed to highlight why it has been globally recognised as a country help to spearhead and popularise mobile money. It offers an authentically African-built and regulation-compliant platform of crypto products through which our users will find the ease, reliability, and transparency that they have always sought in financial and entrepreneurial solutions. Fintech startups are becoming more active as a result of the adoption of digital technologies and mobile applications in financial services. Yet for FinTech, what would be a bane to other regions is instead a boon that could see it leapfrogging far ahead. According to a research by Disrupt Africa, Fintechs in Africa raised USD 320 million in investments and saw an average of 60 percent growth since January 2015. Disrupts Media Limited 2018, All Rights Reserved | Website hosted & maintained by, Software Engineers in Dubai Earn 30% More Than Those in Other Global Tech Hubs Like London & Berlin, Domestic and International Payment Processes Consolidated by Monoova and Moneytech FX, Tribal Finds MENA Customers Use 25.4 Virtual Cards on Average, Daman Investments PSC leads the successful capital raising for Spotii, a leading Shop Now, Pay Later platform in the Gulf Cooperation Council, GITEX Africa 2023 Looks to Unlock Moroccos Tech Potential, Hands In Announces David Parker, David Birch, Paul van Alfen, and Mark Ufland to Advisory Board, This Is Just the Beginning: Saudi Arabia Raised $402.2million in Total Investments Across 2022, Bilderlings Highlights Importance of Investing in Emotional Health With Charity Project Launch. It seems to me that you forgot to mention Zenka. Abacus also builds mobile and web software platforms that help investors to access financial markets in Africa. JamboPay is one of the top financial tech companies in Kenya. The idea behind the company is to close the data gap that exists in the financial industry that prevents smallholder farmers from getting funding. The M-PESA money transfer service was created in 2004 by Vodafone and Safaricom and is based on the mobile network of the two companies. The development of modern FinTech stretches back further than a few decades, however. Traditional banks in the U.S. are keenly aware of this, but they consistently fail to transfer that trust into cutting-edge products. Also provides an unsecured cash advance of up to Kshs 5M to merchants using their mobile payment app. BitPesa came into the market at a time when many Kenyans found it challenging to buy or sell cryptocurrencies. Accelerate your career with Harvard ManageMentor. There are numerous advantages to fintech in Africa. For instance, a report from the International Monetary Fund (IMF) called FinTech in Sub-Saharan African Countries highlights that Sub-Saharan Africa has become the global leader in mobile money transfer services, which has brought widespread access to financial services. In the report, CB Insights examines the top 250 private fintech companies that are transforming financial services using technology. The company also has a credit scoring model that assures the disenfranchised smallholder farmers in Africa get access to funding. The Tanzanian government receives Sh18.3 million ($177,947), while South African businesses receive Sh15.8 million ($132,806). (CMA) mandated the creation of Open Banking API standards . Europe has seen a similar growth, with an estimated 1,500 fintech firms, while Asia-Pacific comes in at a distant third with just over 1,000. This is a relatively large number given the size of the countrys population and economy, and reflects the high level of interest and investment in the Kenyan fintech sector. For example, recent ones include Microsoft and Visa, who this year made commitments to the country, with the former announcing a new office for its African Development Centre (ADC). On 28th July, 2021, our company's name was changed to Tracxn Technologies Limited. This is not surprising, given the high potential for growth in these markets. There are 434 FinTech startups in Kenya. In contrast to Uber, which disrupted the transportation sector in the same way that fintechs do, fintechs do not disrupt their industry. Kenyan farmers who do not have enough capital to purchase critical farm inputs can use FarmDrive to gain access to loans and other financial tools. An individual or organisation that uses BitPesa has between one and two hours settlement to prevent them from losing in the volatility. Today's top 34 Fintech jobs in Kenya. 2023-06-01 - The emergence of FinTech has opened up new avenues for driving social impact and addressing global challenges. According to Disrupt Africa data, 573 fintech startups are currently operating in Africa, which includes Paytech (payments and transfers), Lendtech (Jumo), Banktech (digital and neo banks), Insurtech, Blockchain, and Cryptocurrency. Individuals can use JamboPay to pay for goods and services using their mobile phones and at agent points. These enablers need not be recent innovations, but are often salvaged from dying or outdated models. Venture capitalists, traditional finance firms, governments, and even the average smartphone user each had a hand in the massive acceleration of its growth. Firms can use the platforms offered by the company to pay for things like supplies, utilities, taxes, and salaries digitally. It is one of the top online payment platforms we have in Kenya. Packline Systems offers financial-based software services to leading financial institutions around, focusing on the provision of affordable state of the art IT solutions for African Financial Market. Save my name, email, and website in this browser for the next time I comment. Earn badges to share on LinkedIn and your resume. Fintechs in Africa continue to overshadow all other startups in funding gained, Reports say African startups raised record-smashing $4.3B to $5B in 2021. Transactions can be conducted more easily and more efficiently as a result of their ease and convenience, and the cost of transactions can be reduced as a result. Kenyas growth is noteworthy given that it is soaring at a time when venture capital funding continues to slow down across the globe. The initiative is to be anchored on five core principles, namely trust, security, usefulness, choice and innovation, and builds upon an existing foundation to deliver key initiatives, including full-scale interoperability, fostering customer-centric innovation and supporting the emergence of an around-the-clock economy. In 2018, China's $25.5 billion FinTech market accounted for 46% of all FinTech investments globally, making it the largest such market in the world. 73 Best Kenya FinTech Startups - The Future of FinTech - The Startup Pill Startup Pill 73 Best Kenya FinTech Startups - The Future of FinTech Table of Contents show This article showcases our top picks for the best Kenya based FinTech companies. Eastpesa offers a platform for mobile users to send money to any mobile number in East Africa. Between 2020 and 2021, there were approximately 5,200 tech start-ups in Africa. PayPal, Amazon, and eBay were founded in 1995, with PayPal taking the lead in 1997. WeChat and Alipay are such high-performing payment platforms that even rural vendors and laborers flash personalized QR codes. For example, the telecommunications giant Safaricom, which contributes 5% of the countys GDP, led the push in 2007 with its M-Pesa money transfer service, which functions much like a limited mobile bank but without the need for an Internet connection. READ ALSO: 17 top loan apps in Kenya for genuine instant loans. Other fintech subsectors comprise the remaining nine per cent of Kenyas fintech ecosystem. The company also offers a solution that allows individuals to schedule payments. Millennials, now between 25 and 40 years old, manage just 24%. Apart from M-Pesa, which is the most popular fintech service in the region, the increasing numbers of small businesses have motivated companies to develop electronic payment methods and financial planning tools. Bryon Sitawa, a Kenyan university graduate, founded Chura limited in 2013. It offers a solution that enables businesses to send and receive money globally. Another innovative solution offered by Popote Pay is loan lending. Kenya is rapidly becoming an African fintech innovation hub. It offers a platform for farmers to access credit and farm inputs through crop health assessment. The exact figure can also vary greatly depending on where you are and where you are seated. Conceived equally through ingenuity and necessity, Equitel is a new type of hybrid firm: a telecommunications company born of a bank. It sent agents throughout the country, even to remote areas where other banks and telcos had not ventured, to demonstrate usage. . Advancements like remote payments, app-based stock trades, and automated insurance claims became commonplace. Kenyan startups raised nearly one billion dollars in the first half of 2022, surpassing what the country secured last year. While this generation is already used to having its money in a purely virtual space, it is not used to engaging with a band of financial products traditionally dispensed from brick-and-mortar institutions. It accepts all major credit cards, mobile money, and e-wallets. The second is personalizing needs and delivery. This amount was also more than double the $1.35 billion investment that fintechs in Africa raised in 2020, and triple the amount in 2019. Kenya received more venture capital funding in the first quarter of this year than it did all of last year, amounting to $412 million. Individuals can use the platform to buy goods and pay for their services online and at local stores. Twenty-four countries have committed to a Digital Economy Blueprint following Kenyas example. Nigerias highest-paid executives earn a total of Sh22 million ($213,731). M-Pesa combines Safaricoms mobile infrastructure with an agent model; Safaricom stores their balance and customers can go to one of 110,000 agents throughout the country to conduct transactions in person. BitPesa offers digital wallets for cross-border money transfers for individuals. Kenya is most likely ranked high in the StartupBlink report due to the countrys emphasis on developing innovative financial products and services. The country has seen skyrocketing mobile penetration rates, with subscriptions surpassing the total population amount by 12%, and FinTech innovations have followed. The report puts the number of fintech companies in Africa at 491. The term fintech is derived from the words financial services and technology. Banks, insurers, property management companies, government regulators, and other organizations in this industry use back offices and financial ledgers. Kenya and Tanzania account for the lions share of its transactions, with more than $314 billion sent annually. Africinvest, Novastar Ventures, Enza Capital and 13 Other Investors [Investor Details], Lipa Later "COVID has been an economic and a health crisis. Here is a list of the 10 most exciting ones, Apollo Agriculture As of 2019, there were an estimated 44 fintechs in Kenya, according to a report by the Fintech Association of Kenya. Pesapal also offers a point-of-sale solution for businesses. This is a niche crowd investment platform dedicated to African companies. Chura Limited is a Kenyan start-up that eases interoperability across various mobile operator networks. CarePay is one of the few Fintech Kenya companies that use technology to offer financial assistance to individuals that want to access healthcare services. What happened to Rachel Hawes and is she still alive today? Advertise With Us According to a Markets and Markets report, the global fintech market will reach 2.5 trillion by 2027. A Safaricom employee displays the M-Pesa money transfer service on a smartphone inside a mobile phone care centre in Nairobi on November 22, 2018. Equitel, a mobile virtual network operator competing with Safaricoms M-Pesa, is pushing boundaries for financial inclusion even further by offering a full suite of banking services on mobile devices. Flutterwave, another African unicorn, grew out of the country as well. It also provides software for customer management, insurance sales, and insurance pricing. During the first 11 months of last year, Kenyans made 1.9 trillion mobile money transactions worth more than $55billion, while transactions in the first 11 months of 2021 were up 20 per cent on the whole of 2020. The company also has many customised payment solutions for small businesses. According to a recent report, the average salary for a Fintech Specialist is $114,500 per year. Apart from individuals, Fintech companies also make it easier for SMEs to digitise their payment systems and get access to loan facilities that they would otherwise not have received from traditional banks. READ ALSO: How to register on IFMIS as a supplier. |. You are already subscribed to our newsletter! Both multinational companies (MNCs), and those specifically in the tech and fintech sphere, have made strong investments in the country, boosting foreign direct investment (FDI) in it too. Through its mobile phone platform M-TIBA, Kenyans can save, send, and spend money for medical treatment only. While financial inclusion in Kenya was at just 26 per cent in 2006, in 2022, at least 83 per cent of the population has access to at least basic financial services. Kenya fintechs have high market share, but could lose out to traditional firms . But it may not be the leader for long. Popote Pay is a fintech company that enables all types of businesses to digitize their payments. Direct Pay Online Group is one of the few technology companies in Kenya that offers secure payment platforms that allow businesses to accept cross-border payments, mobile payments, and credit cards. Today, Kenyan-focused financial technology businesses are, by far, the most popular. The quartet accounts for 87% of the funding raised by startups in Africa. Kopo Kopo is a platform to enable small and medium businesses to accept mobile payments and build relationships with their customers.