L-R: 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, a fintech firm with a regional focus on the African continent, has underscored the need for fintech founders to strengthen investor confidence in order to facilitate increased investment in the African fintech industry.
Chika Nwosu, managing director, PalmPay Nigeria, stated this recently in his presentation at the recently concluded 2024 Nigeria Fintech Week in Lagos, Nigeria.
According to Nwosu, 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,” he stated.
Nwosu, who participated in a high-profile panel discussion themed “Safeguarding the Funding Pipeline for Fintech in Africa”, stated that founders can mitigate these challenges by diversifying their revenue streams and expanding into multiple geographical regions.
He added that relying solely on one market can expose companies to regional economic volatility.
“By entering diverse markets, fintechs can spread their risk and minimize the impact of instability in any single region,” he said.
The PalmPay MD gave the example of Palmpay being operational not only in Nigeria but also in Tanzania, Ghana, and other markets.
The 2024 Nigeria Fintech Week held under the overarching theme “Positioning Africa’s Fintech Ecosystem to Accelerate Growth”, with a key focus on seeking more investors who see the long-term value of investing in Africa. The conference brought together industry leaders, policymakers, investors, and innovators to chart the future of Africa’s financial technology landscape.
Ade Bajomo, the president of FintechNGR, pointed out that investments in the fintech sector in Africa declined significantly, dropping 77 percent to $186 million from $826 million in the first half of 2023.
In a similar trajectory, the number of deals decreased 30 percent year-on-year and average deal size fell to $4 million in the first half of 2024 from $10.5 million in H1 2023.
Despite the fall in fintech investments, Bajomo remains optimistic of many growth opportunities in the continent.
The panel session also weighed in on the need for founders to continuously engage with policy makers and regulators to stay informed.
