REPORTAGE // A new playbook for African fintech
Highlights from a 2024/2025 report by McKinsey & Company
Fintech in Africa has seen a decade of dizzying growth driven by venture capital and digital adoption, fuelling financial inclusion, entrepreneurship, and economic transformation across the continent. Yet, as the industry matures, the landscape is shifting: investment preferences are evolving, regulatory frameworks are tightening, and fintech players are being forced to rethink their strategies.
McKinsey & Company’s recent report, Redefining Success: A New Playbook for African Fintech Leaders, is a sweeping review of Africa’s fintech landscape and offers key insights for navigating the next phase of the sector’s evolution. Moving beyond the “growth-at-all-costs” era, this report provides a fresh perspective on how African fintech firms can drive long-term sustainability, profitability, and strategic expansion.
Here are five key takeaways from the report that investors, and more importantly, industry leaders should keep top of mind as they chart their next moves through the continent’s next wave of fintech innovation.
Market expansion continues, but the growth formula has changed
Despite economic headwinds, Africa’s financial services sector remains a strong performer, with annual revenue growth expected to rise from 8% (2018–2023) to nearly 10% per year between 2023 and 2028. This puts the total addressable African financial services market on track to hit USD312 billion by 2028, with a whopping USD47 billion from fintech alone.
However, funding patterns tell a different story. Global investors are pulling back, and fintech investment dropped 37% from 2022 to 2023, followed by a 51% decline in the first half of 2024 compared to the same period in 2023. As funding tightens, fintechs reliant on external capital are struggling, with many downsizing or merging to survive. Previously high-flying start-ups like Cellulant and MarketForce have faced restructurings or shutdowns. This signals an urgent need for innovative business models that prioritise sustainability and profitability with a focus on diversified revenue streams.
“Founders are going to build stronger businesses because the bar for funding has risen significantly,” the report quotes one investment fund manager as saying.
For MBA students and African entrepreneurs alike, this signals a shift from a blitz-scaling mindset to something more akin to “smart scaling”, balancing growth ambition with operational discipline.
The rise of consolidation and collaboration
Africa’s fintech ecosystem is entering a period of consolidation and convergence. While mergers and acquisitions (M&A) are on the uptick as struggling firms seek lifelines and stronger ones scale through acquisition (Paystack’s acquisition of Brass, and Lesaka’s R1.6 billion deal for Adumo, are notable examples), the industry is also shifting towards deeper collaboration. Rather than seeing banks and telcos as competitors, fintech players are increasingly forming strategic partnerships to expand their market reach, navigate regulatory complexity and unlock interoperability. MTN and JUMO’s Qwikloan or Fingo’s partnership with Ecobank are both examples of players in the African ecosystem doing just that.
Such partnerships will likely define the next stage of fintech’s growth, coopetition: competitors aligning to unlock shared value.
Fintech is integrating and specialising
The boundary between fintech and other sectors is fading, making embedded finance a rising trend. Fintech innovation is no longer restricted to payments and lending, now integrating across industries spanning mobility, energy, healthcare, and retail.
For example, Moove, a fintech focused on vehicle financing, embeds credit offerings into ride-hailing platforms, while logistics fintech Korridor simplifies cross-border trade payments. Similarly, in the energy sector, businesses like M-KOPA use fintech solutions to offer pay-as-you-go solar energy plans, making clean energy more accessible. These embedded finance models align with what business strategists might call value chain integration, offering financial services at the point of need, rather than through separate platforms.
This shift reflects a growing trend toward customer-centricity. Instead of asking customers to come to fintech, the best players are meeting customers where they are – on their phones, in the apps they already use, and within the services they already consume. Fintechs offering hyper-focussed, specialised solutions rather than chasing broad market expansion may have a higher chance of success. The report highlights that companies solely focused on scaling rapidly could struggle, while niche, customer-centric services like SME lending, remittances, and asset-backed financial products hold massive potential.
Fintech’s regulatory headwinds will be regional, not continental
African fintechs must navigate fragmented and evolving regulatory environments, as different countries introduce new data protection laws, digital taxation, and financial compliance measures. The report makes it clear: there is no one “African fintech story”. Instead, we are seeing regionally distinct models emerge:
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Kenya and Nigeria are prioritising consumer protection and data security.
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South Africa and Rwanda are focusing on financial digitisation and regulation enforcement.
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Cross-border trade initiatives like PAPSS (Pan-African Payment and Settlement System) are streamlining payments across African markets.
Understanding these regulatory changes and proactively engaging with regulators will be crucial for fintech players looking to scale without compliance roadblocks.
A new playbook for African fintech
McKinsey’s report makes one thing clear: the African fintech space is still ripe with opportunity, but success requires strategic agility. Investors are shifting their focus toward profitability and financial discipline, and fintech leaders must embrace specialisation, partnerships, and embedded finance models to stay ahead.
The next wave of fintech innovation is already unfolding, and those who adjust their strategies accordingly will be best positioned to thrive. Africa’s fintech boom is far from over, it is simply entering a new era.
Read the report
For a deeper dive into McKinsey’s analysis, read the complete report here.
by Shivani Ghai
