Ghana Placed Among Africa’s Fastest Growing Fintech Markets

Mckinsey Report
Mckinsey Report

Fintech Africa Report from industry analyst and research firm, McKinsey has named Ghana as one of the fastest growing fintech markets on the continent with an annual growth rate of 15%.

According to the report, currently, the lion’s share value in the market, of approximately 40%, is concentrated in South Africa, but moving forward, “the fintech market is expected to grow fastest in Ghana and Francophone West Africa, by 15% and 13% per annum respectively, over the next three years. These markets will be followed by Nigeria and Egypt, each with an expected growth rate of 12% per annum over the same period.”

Per the report, Kenya still remains one of the biggest fintech markets on the continent, but Ghana is fast catching up with Kenya at that growth rate.


The report said by 2025, Ghana’s fintech market is expected to be valued at US$18.6 billion, growing eight time from 2020. Kenya is still expected to sit at the top with a value of US$30.3 billion in 2025. Meanwhile, the Africa average (excluding South Africa) is expected to be a little over US$11 billion.

But the estimated penetration of fintech into African market is still quite low at 8% for Ghana, 13% for Kenya, and an average of 5% for the rest of Africa, excluding South Africa.

Blockchain and Crypto lead

But the trick here is that blockchain and cryptocurrency are expected to lead the pack among the key growth drivers.

Blockchain Lead
Blockchain Lead

“Blockchain and cryptocurrencies are set to grow the fastest, recording a projected compound annual growth rate (CAGR) of 50% from 2020 to 2025. This sector will be followed by payments and digital wallets, both at around 20% CAGR,” the report said

This should trigger Ghana’s industry regulator, Bank of Ghana, to quickly heed the many calls in the country to lead the way through innovations regulation to ensure Ghana gets it fair share of that growth instead on stifling the introduction of cryptocurrencies in Ghana.

That call was first made by Chairman of Ghana Dot Com, Prof. Nii Narku Quaynor and recently by Communications and Digitalization Minister, Ursula Owusu Ekuful.

Meanwhile, account management is expected to grow by 10%, wealth management and insurance at 8% each, while remittance and retail/SME lending record 6% growth each.

According to the report, African fintech companies have made significant inroads into the market over these past couple of years, with revenues reaching US$4 billion to US$6 billion in 2020 and average penetration levels of between 3 and 5% (excluding South Africa).

The report said the momentum is projected to continue on with fintech revenues expected to grow eight times their current value to reach US$30 billion by 2025.

It noted that cash transactions still account for 90% of all transactions on the continent and that presents a great potential for fintech growth in both volume and value.

“The rise of Africa’s fintech industry will be driven by growth in the broader financial services sector, a space that could see revenues grow at about 10% per annum to reach US$230 billion by 2025 (US$150 billion excluding South Africa),” McKinsey said.

Overall, McKinsey anticipates that the growth opportunity in fintech will mainly be concentrated in these 11 markets, namely Cameroon, Côte d’Ivoire, Egypt, Ghana, Kenya, Morocco, Nigeria, Senegal, South Africa, Tanzania, and Uganda.

Together, these nations account for 70% of Africa’s gross domestic product (GDP) and half of the continent’s population. Additionally, they are providing fintech companies with a favorable environment to develop and thrive, including increased digital readiness, higher mobile and Internet penetration, and supportive initiatives from the government.

Drivers of Fintech Adoption

Ghana and Nigeria, for example, have recorded the highest growth in smartphone usage in the world; Nigeria, Ghana, and Uganda have launched programs to improve financial inclusion and reduce cash transactions; and Egypt, Ghana and Nigeria are currently the only three jurisdictions in the continent to have introduced a real-time payments system and modern payment infrastructure to enable rapid scale-up of fintech services, McKinsey notes.

Part of the success of the sector and companies have been driven by several trends, including increasing smartphone ownership, declining Internet costs, and expanded network coverage, coupled with the region’s young, fast-growing and rapidly urbanizing population.

Though adoption of fintech, notably digital payments and wallets, has been growing steadily for several years, the COVID-19 pandemic accelerated the trend amid social distancing requirements.

Global Study

A 2020 global study conducted by the Cambridge Centre for Alternative Finance (CCAF) at the University of Cambridge Judge Business School, the World Bank Group and the World Economic Forum, found that fintech companies in the Sub-Saharan African region reported a year-on-year (YoY) average increase of 12% in transaction volumes in H1 2020.

Digital payments witnessed the strongest growth, with transaction volumes rising 25% YoY in H1 2020 and new customer increasing 22%. Insurtech companies also gained notable traction during the COVID-19, with transaction volumes rising 15% YoY in H1 2020 and the number of new customers growing 18%.

In Africa, fintech companies have risen in popularity largely because they offer products that are more convenient and affordable than traditional financial services providers. McKinsey estimates that transactional solutions provided by fintech companies can be up to 80% cheaper, while the cost of remittances may be up to six times cheaper. Interest on savings meanwhile can be up to three time higher than those offered by traditional players.

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