4 obstacles that developing African fintech may confront.

1) Growth and Profitability:

All over Africa, there is a lot of room for fintech to grow, but in some places, infrastructure problems limit the size of the market.

Some of these problems include spotty internet and cell phone service.

In some markets; no protection for personal information; and limited payment rails, which are the basis of all digital money transfers.

FinTechs that want to grow across the continent might need to think about these differences in geography.

Adapt their plans for each country based on its unique characteristics, infrastructure, regulatory frameworks, and customers' different needs and habits.

2) Scaling up is merely one step in a successful growth process.

An unclear regulatory environment

FinTechs in Africa also have trouble with a financial regulatory framework that isn't consistent and infrastructure that isn't the same in all markets.?

The rates of evolution vary significantly amongst nations.

FinTechs may find that they can't adjust quickly enough to stay up with regulation, which, along with the level of enforcement, might occasionally change rapidly.?

In some countries, entrepreneurs and investors may have to deal with unstable exchange rates and strict controls on foreign exchange.

This makes it harder to stay consistent.

3) Scarcity

To start and maintain growth, it is important to efficiently manage time, money, and people.

This implies that African fintechs would probably need to make financial sacrifices to adapt to a new venture funding reality.

As a result, there is less competition among funds to invest in deals, which leads to lower valuations, smaller round sizes, and many fewer deals closing.

About 70% of the funding for most fintech start-up agreements comes from investors outside of Africa, mostly in North America.

FinTechs that are successful will probably need an ambitious plan to entice, nurture, and keep the greatest talent.

Future success for fintechs will depend on how well they can negotiate the twin challenges of decreasing funding availability and rising talent rivalry.

4. Strong corporate governance

FinTechs will need world-class corporate governance to negotiate this uncertain and fragmented landscape, manage shortages, and reach scale and profitability.

Effective governance can assist in developing a strong, positive organizational culture that gives stability, clarity, and direction.

A good corporate governance model is based on building a strong culture, getting stakeholders involved well, and having a clear talent strategy to build the organization's skills.

Because fintechs can evolve quickly, they need a strong compliance foundation to actively manage regulatory change and avoid regulators' wrath.

Thoughts?

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