Chika Nwosu, the Managing Director of PalmPay Nigeria, has emphasized the necessity of fintechs to increase investor confidence to stimulate additional investment throughout the continent, pointing out that generating value requires strong collaboration with investors.
Speaking at the just-ended 2024 Nigeria Fintech Week in Lagos, accessed by BrandSpur business and economy news desk, which had as its topic “Positioning Africa’s Fintech Ecosystem to Accelerate Growth,” Nwosu made the request.
He had this to say: “The fintech ecosystem is not saturated, but founders need to be mindful of building investor’s confidence amid currency devaluation and rising interest rates. We have seen that most of the currencies of sub-Saharan Africa have plummeted against the US dollar, including the Egyptian pound, naira, rand, cedi, Congolese franc, and Kenyan shilling.
“This devaluation is impacting the value of investments, which in turn lowers investor confidence and makes it difficult for fintech startups to secure funding,” Nwosu added.
According to Nwosu, who took part in a panel discussion titled “Safeguarding the Funding Pipeline for Fintech in Africa,” founders might lessen those difficulties by diversifying their sources of income and growing into other areas. He added that companies may be vulnerable to regional economic volatility if they just rely on one market.
Continuing, he stated: “By entering diverse markets, fintechs can spread their risk and minimize the impact of instability in any single region.”
Investments in the fintech industry in Africa have drastically decreased, falling 77% to $186 million from $826 million in H1 2023, according to Ade Bajomo, President of FintechNGR. He said: “The number of deals decreased 30 percent year-on-year, and average deal size fell to $4m in H1 2024 from $10.5m in H1 2023. However, we still have many growth opportunities in the continent.”
Bajomo added that to keep on track; founders must constantly interact with regulators and policymakers.
