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The Ecobank banking group has launched a Fintech challenge aimed at entrepreneurs in Africa. This contest carries a cash prize of $50,000 and may help us to understand how this market is expected to grow in the future.

The full details

This is the fifth year of the Ecobank Fintech Challenge for startups in the early or mature stages. Entrepreneurs from any of the 54 countries in the African continent are encouraged to take part, and they can apply up to the 16th of September. African-oriented fintechs based elsewhere can also take part.   

The wins will be chosen from those entrants that are most closely aligned with the bank’s own strategic objectives. Ten startups will be chosen as the finalists and they’ll be inducted in the Ecobank Fintech Fellowship following the awards ceremony in October this year.

As well as the prize money of $50,000, the top fintech will have the chance to partner Ecobank and scale their solution across the 33 different countries in Africa where the group has a presence. The rest of the finalists will also be given the opportunity to work with the bank at exploring how to grow their businesses.

Ade Ayeyemi is Ecobank’s Chief Executive Officer, and he stated that supporting and collaborating with fintechs and startups is the “only way to transform financial services in Africa”, and he invited the continent’s best fintechs to work with them in the 2022 Challenge.

The growing importance of technology in Africa

While Africa’s internet penetration rate of 36% leaves it well behind the global average of 62%, it’s expected that around 300 million more Africans will go online in the next three years. The increasing smartphone ownership rates and the rollout of internet networks is allowing more and more Africans to go online for the first time.

This has led to rapid growth in areas such as cryptocurrencies, which have become important among the unbanked population as a way of sending and receiving money outside the traditional financial system. Kenya, South Africa and Nigeria are all reported to have digital money user rates of over 6%, while the Central African Republic adopted Bitcoin as a legal currency in 2022. 

New online entertainment options have also reached Africa. The likes of 888 Casino and Betway can be used in some countries – such as Egypt and Algeria – where residents need to access international sites. No roulette strategy guarantees a win, but the Martingale system is popular: visit this site to read about online roulette strategies.

According to a study by Newzoo, the number of gamers in sub-Saharan Africa rose from 77 million in 2015 to over 180 million last year. Interestingly, about a third of those gamers pay to play, with digital tokens like Bitcoin heavily used in this respect. 95% play on smartphones, marking a shift away from the previous trend of playing on PCs in internet cafés.

As for banking with traditional banks, Africa is regarded as the second-fastest growing global market behind the Asia-Pacific region. This is partly due to internet banking making it easier for Africans to sign up for an account and then carry out their transactions. However, the number of accounts and users is still heavily skewed towards certain countries, such as South Africa and Nigeria.   

The Fintech situation

Huge sums of money are currently being pumped into African fintech companies, with about $1 billion raised by tech-based startups last year. This is around 50% of the total startup funding raised in Africa in 2021. In addition, they point out that five of the seven African unicorns are in the fintech sector.

Indeed, this led to the debate about whether the fintech space in the continent is already over-crowded. Yet, the total number of fintechs across Africa is fewer than 600, compared to thousands in countries like the US and the UK, which is arguably the world’s leading fintech centre.

This challenge is a useful way for emerging companies in Africa to get a helping hand in changing the way that people handle their money online. Not every fintech will be a success story, but initiatives like this will help to boost their chances of prospering in a highly competitive market.