L-R: Dr Babatunde Obrimah, COO FintechNGR; Tiwalola Osazuwa, Partner, AELEX Partners; Noble Obasi, Team Lead for Private Equity, Capital Markets, and Mergers & Acquisitions, Stren & Blan; Ade Bajomo, President FintechNGR; Bemi Idowu, Founder & MD, Talking Drum; Taiwo Kamson Ketiku, Principal, EchoVC; Chika Nwosu, MD, PalmPay after a panel discussion at the just concluded 2024 Nigeria Fintech Week.
PalmPay has called on fintech founders to prioritize strengthening investor confidence to boost funding across the continent. Highlighting the impact of currency devaluation and rising interest rates, PalmPay emphasized that close collaboration with investors is crucial to maintaining value in Africa’s growing fintech sector.
Speaking at the recently concluded 2024 Nigeria Fintech Week, held in Lagos from October 8-10, PalmPay Nigeria’s Managing Director, Chika Nwosu, noted that while Africa’s fintech ecosystem still has room for growth, founders must be mindful of building trust with investors. He stressed that the devaluation of several sub-Saharan African currencies, including the Naira, Egyptian pound, South African rand, and Kenyan shilling, has significantly reduced the value of investments, posing challenges for startups seeking new funding.
“The fintech sector in Africa is far from saturated, but founders need to address the concerns of investors, especially amid economic instability,” Nwosu said during the panel session titled “Safeguarding the Funding Pipeline for Fintech in Africa.” He recommended that fintech companies diversify their revenue streams and expand into multiple markets to reduce exposure to regional economic volatility. “By entering diverse markets, companies can spread their risks and reduce the impact of instability in any one region,” Nwosu added, noting PalmPay’s expansion into Tanzania, Ghana, and other markets as a strategy for managing risk.
The 2024 Nigeria Fintech Week, themed “Positioning Africa’s Fintech Ecosystem to Accelerate Growth,” aimed to attract investors who see long-term potential in Africa’s financial technology landscape. The event brought together industry leaders, investors, and innovators to explore opportunities for growth and collaboration.
Ade Bajomo, President of FintechNGR, provided insight into the current state of fintech investments on the continent, revealing a sharp decline in 2024. “Investment in Africa’s fintech sector plummeted by 77%, dropping from US$826 million in the first half of 2023 to US$186 million in the first half of 2024,” Bajomo stated. He also highlighted a 30% drop in the number of deals and a reduction in average deal size from US$10.5 million to US$4 million. However, Bajomo expressed optimism, noting that opportunities for growth still abound in the fintech space.
Panelists also discussed the importance of engaging with policymakers and regulators to stay informed on the latest regulatory developments. Continuous engagement with regulators, they noted, is key to navigating the shifting financial landscape and sustaining investor confidence.
PalmPay’s contributions to the discussion underscored the need for strategic growth, risk diversification, and closer collaboration with both investors and regulators to ensure the long-term success of fintech in Africa. Despite the challenges, the company remains optimistic about the sector’s potential to drive economic growth and innovation across the continent.
