As fintech innovations continue to take ahold of Africa, several key trends are shaping the landscape in 2025, among which the rapid expansion of mobile money, the growing influence of virtual assets, and increasing attention to cybersecurity, a new report by Bowmans, a pan-African legal firm, says.
The report, released in December 2024, examines the current and emerging fintech trends across the continent. It highlights the growth of mobile money, with platforms like M-Pesa significantly increasing financial access in countries like Tanzania. Alternative lending and buy now, pay later (BNPL) are expanding rapidly, driven by mobile technology and investor interest.
Cybersecurity is becoming a priority, as the continent faces escalating cyber threats. Meanwhile, nations like South Africa, Mauritius, and Nigeria are pioneering virtual asset regulations, striving to align with global standards to foster cooperation.
Finally, open finance is gaining traction, with Nigeria and South Africa leading regulatory developments to enhance data sharing and financial innovation.
1. Mobile money drives financial inclusion in Africa
Mobile money is experiencing a surge in Africa, with services like M-Pesa leading the charge in mobile phone-based financial services and significantly contributing to improving financial inclusion.
In Tanzania, mobile money has seen substantial growth since the introduction of M-Pesa in 2008, with government support for fintech innovation further accelerating this trend. Today, six mobile network operators offer their own mobile money platforms, contributing to the surge of mobile money. Mobile money account ownership has increased from 32% in 2014 to about half of the population in 2023, enabling more financial inclusion and access to digital payments, according to Bowsman.
In Uganda, mobile money has emerged as a dominant force in the fintech sector, accounting for about 65% of the total value of electronic transactions. The sector, which is dominated by telecommunications companies, is enhancing financial inclusion, especially in rural areas.
In Ethiopia, mobile money usage surged followed the introduction of the National Payment System Amendment Proclamation in 2023, which allows foreign investors to engage in mobile money and payment operator businesses. By December 2023, new mobile money account openings in Ethiopia had reached 90 million, up from just over 15 million in 2021.
In Zambia too mobile money transactions are seeing significant growth, totaling a value of US$18 billion in 2023. Meanwhile, in Mauritius, although mobile money is growing, the sector remains largely local.
Leading the mobile money revolution is M-Pesa, a leading mobile phone-based money transfer service, payments and micro-financing service launched in 2007 by Vodafone and Safaricom, the largest mobile network operator in Kenya.
According to Statista, the platform has gained significant popularity across Africa, enabling over 66.2 million users in Kenya, Tanzania, Mozambique, the DRC, Lesotho, Ghana, Egypt, Afghanistan, South Africa, and Ethiopia to deposit, withdraw, transfer money, pay for goods and services, and access credit and savings, all through their mobile devices.
The success of M-Pesa illustrates the growing influence of mobile network operators (MNOs) in the fintech space. According to Bowsman, this is intensifying competition with traditional banks, particularly in West Africa, where mobile and online banking are gaining traction.
2. New rules to welcome virtual assets in Africa
Virtual assets, including cryptocurrencies and digital assets, are gaining attention across Africa with countries adopting different regulatory approaches
South Africa was an early adopter of of crypto regulation, introducing the Financial Advisory and Intermediary Services Act in 2022 and requiring Crypto Asset Service Providers (CASPs) to obtain licenses to operate and comply with anti-money laundering (AML) regulations. As of April 2024, 75 institutions had been granted a license, News24 reported. Additionally, the South African Reserve Bank is exploring the feasibility of a central bank digital currency (CBDC).
In Mauritius, the Virtual Assets and Initial Token Offering Services Act came into force in 2022, regulating Virtual Asset Service Providers (VASP) and issuers of initial token offerings. This legislation is novel in that it provides for licensing of different classes of activities covering virtual asset broker-dealer licenses, wallet service providers, custodians in the digital coin markets, advisory services and marketplaces.
Namibia, meanwhile, enacted the Namibia Virtual Assets Act in 2023, requiring all VASPs to obtain licenses from the Bank of Namibia. This legislation regulates virtual asset trading and transfers while imposing strict requirements for VASPs and stakeholders.
Nigeria is also making strides in regulating digital assets. In September 2024, the Securities and Exchange Commission granted approval to two local cryptocurrency exchanges, Quidax and Busha, marking a significant step towards regulating crypto. The move is part of its Accelerated Regulatory Incubation Program (ARIP), which aims to support fintech firms while ensuring compliance and investor protection.
Although Sub-Saharan Africa still accounts for a relatively small share of the global crypto economy, the region is emerging as a leader in adoption. According to Chainalysis, Nigeria ranked as the second-biggest adopter of cryptocurrency in 2024, while Ethiopia (26), Kenya (28), and South Africa (30) also made it to the top 30.
3. Cybersecurity becomes a priority in Fintech in Africa
With the rise of digital financial services and the growing threat of cyberattacks, cybersecurity is becoming a critical focus for African countries, calling for robust regulatory frameworks and strategic collaboration.
Kenya has introduced several cybersecurity laws and initiatives throughout the years, including the Computer Misuse and Cybercrimes Act of 2018, which addresses a range of cybercrimes, including hacking, identity theft, and cyberbullying; the Data Protection Act of 2019, which governs the collection, storage, and use of personal data; and the National Kenya Computer Incident Response Team – Coordination Centre (National KE-CIRT/CC), a multi-agency collaboration framework established to coordinate response to cyber security matters at the national level.
Similarly, in Namibia and Zambia, cybersecurity awareness is increasing, amid booming cybersecurity challenges, including cybersecurity threats such as phishing, ransomware and data breaches. However, there is currently no legal and regulatory framework for cybersecurity.
According to Bowsman, this gap is creating an opportunity for industry stakeholders to create awareness, promulgating appropriate legislation and regulations, as well as collaborating with the government, businesses and individuals to promote education and establish best practices.
Africa is emerging as one of the most targeted regions globally for cyberattacks. In 2023, organizations in Africa experienced the highest number of weekly cyberattacks per organization, doubling previous years’ figures, according to Dr. Abiodun Akinwale, a cybersecurity expert from Nigeria.
Nigeria alone lost over US$500 million in 2022, according to Nigeria’s Economic and Financial Crime Commission, while Kenya reported losses of US$83 million to cybercrime in 2023.
4. Alternative lending and BNPL gain traction
Alternative lending and BNPL arrangements are also highlighted as emerging trends in Africa. These solutions are seeing increased consumer adoption, thanks to the widespread adoption of mobile technology and digital payments, policymakers’ support for innovation, increased access to capital due to attention from investors, and growing demand from largely unbanked population.
For example, Nigeria is home to over 250 fintech companies, with 15% of these companies being focused on small and medium-sized enterprise (SME) lending, according to CGAP, a Washington, DC-based think tank. In Kenya, digital lending has grown over the past decade, with the Competition Authority of Kenya estimating several hundred lenders operating in the domestic market before the COVID-19 pandemic.
The BNPL market is also expanding rapidly. In 2024, the market in Africa and the Middle East was valued at US$15.5 billion, led by Nigeria, Egypt, Kenya and South Africa, a market research estimates. By 2029, that market is projected to grow to US$33 billion, reflecting an annual growth rate of 16.1%.
5. The advent of open finance in Africa
Open finance is another trend that’s gaining momentum in Africa, fueled by regulatory support.
Nigeria is leading the charge with two key regulatory documents: the Regulatory Framework for Open Banking, released by the Central Bank of Nigeria (CBN) in February 2021, and the Operational Guidelines for Open Banking, released in March 2023. These documents primarily define data access levels for qualifying open banking participants and establish a four-tiered risk management system based on the maturity levels of participants.
In South Africa, the current policy and regulatory landscape for open finance is characterized by three key documents, which are the consultation paper published by the National Payment Systems Department (NPSD) on open banking activities; the Financial Sector Conduct Authority (FSCA) research paper on Open Finance; and a draft Position Paper by FSCA on Open Finance.
Although the exact design of the mandatory regulatory regime is currently still being determined, the FSCA’s draft position paper identifies four types of participants for regulatory oversight, namely financial institutions, third party providers, fintech companies and other relevant service providers, setting the stage for a comprehensive open finance framework.
Featured image credit: edited from freepik
