PalmPay MD sees investor confidence driving Africa’s growth

PalmPay, an African-focused fintech company, has underscored the need for founders within the fintech ecosystem to boost investor confidence to drive more investments across the continent.

Chika Nwosu, managing director/CEO, PalmPay, speaking at the recently concluded Fintech Week in Lagos, stated that, “The fintech ecosystem is not saturated but founders need to be mindful of building investor 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 said.

Nwosu, who participated in a 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 noted that relying solely on one market can expose companies to regional economic volatility. “By entering diverse markets, fintechs can spread their risk and minimise the impact of instability in any single region,” he said.

He 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.

According to Ade Bajomo, president of FintechNGR, “Investments in the fintech sector in Africa declined significantly, dropping 77 percent to $186 million from $826 million in H1 2023. The number of deals decreased 30 percent year-on-year and average deal size fell to $4 million in H1 2024 from $10.5 million in H1 2023. However, we still have many growth opportunities in the continent.”