| 2022 in African fintech: Exploring the biggest African fintech stories that shaped the year | 
We’re delighted to share our first long-form piece of the year — a review of 2022 in African fintech. In this article, we explore the most important stories, trends, and themes in 2022 and what they might mean for the ecosystem in 2023. |
|
|
|
| Nigeria | Multichoice set to launch Moment. Multichoice, the owners of DStv and Showmax, have partnered with Rapyd, a fintech platform, and investment firm General Catalyst, to launch Moment — a payment solution for businesses in Africa. Moment will enable businesses in 40 countries to accept payments using 200 local payment methods. TechTrendsKE |
| | EDITOR'S NOTE | In the previous issue, we made a note about dLocal’s Africa strategy: ”…Africa & Asia revenue has grown almost 300% YoY compared to 26% from the LATAM region. With $39 million in quarterly revenue (almost 1500% growth YoY), Nigeria is now dLocal's biggest market by revenue. As African countries face FX scarcity and introduce capital controls, the demand for cross-border payout solutions is rising.”
According to Multichoice’s 2022 annual report, their products are available in 50 African countries to about 21.8 million subscribers. To achieve a seamless experience, they would have had to integrate with local payment methods and manage complex foreign exchange and treasury functions in each market. It’s, therefore, not surprising that they want to own and monetise that experience as a separate payment product.
Consolidating DStv and Showmax subscriber relationships under one payment platform is the first step and the easiest one. Compliantly extending that payment platform to other businesses will require new partnerships, integrations, and licenses across different markets.
It will be interesting to see how businesses react to this new payment offering, but as we’ve seen, the demand for cross-border solutions exists. The supply is just playing catch-up. |
|
|
| Morocco | NAPS partners with Mastercard to develop new payment solutions. Moroccan fintech, NAPS, has partnered with global payments giant Mastercard to develop new payment solutions for Moroccan consumers and businesses. The details of these new products were not disclosed, but NAPS will be looking to leverage Mastercard's vast experience and resources. Afrikan Heroes |
|
|
|
| Nigeria | On cloud adoption by fintechs in Nigeria. Huawei Nigeria and FintechNGR released a white paper on fintech cloud adoption in Nigeria, outlining trends, progress and relevant frameworks. Huawei |
|
|
|
| Kenya | Kenyan lenders push back against 20% excise duty. Digital lenders in Kenya have rejected the 20% excise duty on interest income being proposed by the Kenyan government in the 2023 Finance Bill. The Digital Financial Services Associations of Kenya (DFSAK) has described the proposal as unfair, citing macroeconomic realities and raising concerns about its potential anti-competitive impact. Benjamin Dada |
| | EDITOR'S NOTE | The DFSAK’s concerns seem to be well-founded. Given that digital lenders often impose higher interest rates than traditional financial institutions, they may initially appear enticing for a government seeking to enhance tax revenues.
However, these interest rates are higher because digital lenders face a higher cost of capital and risk of non-payment compared to their traditional competitors. These costs and risks tend to increase during economic downturns. Therefore, any additional operating costs could adversely affect the digital lenders’ ability to prepare for loan impairments. |
|
|
|
| Introducing Paystack Catalyst | 
|
|
|
|
| Africa | AWS selects 25 African fintechs for inaugural accelerator program. Amazon Web Services (AWS), Amazon’s cloud computing arm, has selected 25 African fintechs for its African Fintech Accelerator. These startups will receive advisory services from established startups, technical review workshop sessions and up to $25,000 in AWS technical credits. Disrupt Africa |
| | EDITOR'S NOTE | This might be AWS’ pilot accelerator, but they weren’t the first cloud provider to offer incentives to African startups. Google’s Black Founder’s Fund has given out $10 million in funding and cloud credits to more than 50+ African startups.
In Issue 95, we wrote about the benefits for both the funded startups and Google itself: “Cloud computing comes with relatively low marginal costs and high switching costs. By offering both capital and cloud access, Google recognises that these startups need money to scale but also will find it hard to switch providers once that scale is reached.” |
|
|
| Uganda | Zofi Cash raises $1 million in pre-seed funding. Zofi Cash, an early wage access solution based in Uganda, has raised $1 million in pre-seed funding. The debt financing round was led by Advancly, a B2B finance provider. Disrupt Africa |
|
|
|
Share a tip | Do you have an announcement, event, or job posting you'd like to share, or have you come across an interesting bit of African fintech news recently? Hit reply and let me know! I might be able to include it in next week's newsletter. |
|
Know someone who'd enjoy Decode Fintech? |
|
|
|
|
