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5 Reasons Why an Exclusive Fintech Monopoly Spells Disaster for Africa’s Future.


Africa has long been considered to be the world’s digital frontier. But not all innovations are created equal; some have a broader impact on society and economy than others, which is why we recommend a diversified approach when investing in fintech startups.

African Innovation

African innovation is important. The continent has a rich history of invention and innovation, dating back to ancient times. Today, Africa is home to some of the most innovative entrepreneurs in the world—and this trend shows no signs of slowing down.

African innovators are creating products that people around the globe want: from mobile payments apps like M-Pesa Kenya or Kwik Pay Uganda to e-commerce platforms like DSTO (DST Global) have made billions for their founders and investors by selling their products abroad through online platforms such as Amazon or Ebay.


Africa’s tech sector is booming.

Africa is one of the fastest-growing regions for fintech. In fact, it’s estimated that Africa has the highest mobile phone penetration in the world and a young population that is tech-savvy and willing to adopt new technologies quickly.

Africa also has a large unbanked population—and as you know by now, banks aren’t interested in serving them because they don’t make enough money off them (or at all). This means there’s an opportunity for innovators like your company who can provide financial services at rates lower than what traditional banks charge.

The future is being built outside Africa.

In a recent podcast with the New York Times’ Farai Chideya, she discussed how fintech companies are looking to expand their presence in Africa and other emerging markets. The article highlighted how many of these startups have been forced to look outside their home countries due to limited access or insufficient funding. This is not new news—fintech startups have historically focused on developing markets like Brazil, China, India and Africa because they seem most promising for profitability and growth potential. But this isn’t necessarily an indicator of success; it just means more competition for talent in these regions as well as resource constraints that could limit innovation within those countries’ borders (like bandwidth).

Africa may be huge but it’s not the only place where people live today or tomorrow—and if we want our future generations’ lives here on earth then we need strategies that take into account all options available today rather than limiting ourselves by focusing solely on one particular part at any one time.”

Don’t put all your eggs in one basket.

You may have heard the saying, “don’t put all your eggs in one basket.” What this means is that you should diversify your investments by putting some money into a variety of different companies and sectors so that if one investment suffers, you have other options.

For example, let’s say you invest in only one fintech company. This ensures that if they fail or burn through their capital quickly (which can happen), it will be tough for them to get back on track again without having lost too much money first.

A sudden shift in the market.

A sudden shift in the market can be caused by a change in regulation, a change in technology, or a change in consumer behavior. For example:


  • A limit on the number of transactions per second imposed by Visa and Mastercard could have forced banks to start using fintech companies like Ripple as their preferred payment processing service providers (PPPs). This would mean that banks would need to either switch to these PPPs or lose access to those they already use.
  • The introduction of new technology such as blockchain could lead to changes in how consumers pay for products and services—and thus potentially force companies into investing more time and resources into developing new software platforms capable of doing so.

Why a diversified approach is safer and more profitable.

Mckinsey research 

  • Diversification is a strategy that helps to smooth out volatility.
  • It can help spread risk and improve efficiency.
  • When you diversify, you reduce the impact of any single investment on your overall portfolio returns.
  • This can be especially beneficial if one investor has a large stake in one industry (such as Fintech), while another investor has significant holdings in other industries that are related to it. For example, imagine two investors who each own one share of Fintech at $20 per share—the first investor could lose more than half his total investment if there were another company like Facebook Inc., which went down in price because its CEO announced he was leaving after only seven months at the helm—but since both investors own shares at different times when they’re trading close together (because they’re not correlated), neither investor will see any losses because their respective values won’t change much between these two points along time horizons where participants tend not too much react quickly enough–they might even see gains!


Investing in fintech startups can be riskier than most investors assume.

As a fintech investor, you should be aware that investing in startups is inherently risky. There are many factors that can affect the success of a startup, including its ability to find customers and raise money from investors. In addition, there are no guarantees that your investment will pay off at all—and even if it does, you may lose your entire investment when the company goes bankrupt or gets sold for pennies on the dollar.

Fintech startups can also be more likely than other types of businesses (like tech companies) to fail because they have fewer customers and lower margins; this means less revenue than competitors like Amazon or Google require just to break even with their own costs.


A diversified approach will improve fintech security for all stakeholders.

A diversified approach to fintech investments will help you achieve the following:


  • Reduce risk. By investing in different businesses, you can mitigate the volatility of your portfolio and get better returns on your investment.
  • Help smooth out volatility. When investors are only focused on a few startups, they tend to panic when one falls down, or another rises too quickly resulting in significant price swings that can make it difficult for anyone to make money from their investments over time. With an open-ended investment strategy, investors have more options available at any given time, so they don’t have to worry about being left behind by new developments made by other companies in their industry space (or vice versa). This gives everyone an opportunity for success post-funding because there will always be something new happening somewhere else on Earth!

A broader range of opportunities for efficient innovation.

The greatest challenge in fintech is the lack of financial inclusion, which means that a large proportion of Africa’s population does not have access to credit and does not use formal banking services. This is why we see so many startups working on mobile money services and payment apps—people need to be able to do more than just pay their bills or buy groceries from their phones if they want access to these products and services.

Innovation also comes from people who are outside your industry as well; if you’re focused only on your own field, then you’re missing out on new ideas that might come from somewhere else (like Africa).


Africa is a continent of innovation. It has one of the highest internet penetration rates in the world, and it’s also home to many successful startups. But what if your investments in this area were more diversified? In this article, we’ve laid out some reasons why you should consider investing in more than just one fintech startup at a time. By doing so, you can improve your company’s safety by diversifying its portfolio across multiple sectors like banking, insurance, and other industries that are growing rapidly on the continent today—something which will help ensure long term success for all stakeholders involved in these ventures.

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