EIB Report: African Fintech Growth and Gender Strategies Drive Progress Amid Financial and Climate Challenges

EIB Report: African Fintech Growth and Gender Strategies Drive Progress Amid Financial and Climate Challenges

(IN BRIEF) The EIB’s Finance in Africa 2024 report shows a nearly threefold increase in African fintech companies since 2020, significantly improving financial access across the continent. However, challenges like limited credit and high financing costs still impede economic growth. The report highlights better loan performance among women-led firms, with more banks planning gender-focused strategies. African banks are also grappling with climate risks, with 34% experiencing asset quality issues due to extreme weather. The EIB notes the importance of development bank support in advancing sustainable finance amid these challenges.

(PRESS RELEASE) LUXEMBOURG, 7-Nov-2024 — /EuropaWire/ — A new report from the European Investment Bank (EIB) reveals that the number of fintech companies in Africa has nearly tripled since 2020, reaching 1,263 in 2024. This rapid growth in fintech is driving increased financial access for individuals and businesses across the continent, although challenges persist. The Finance in Africa 2024 report highlights that while digital finance expands, private-sector credit has declined, hampering industrialization and economic growth.

EIB Vice-President Thomas Östros emphasized the transformative impact of fintech in Africa, noting its potential to promote sustainable economic progress. However, economic conditions, funding availability, and high finance costs remain significant barriers, with one-third of banks reporting these challenges.

The report also underscores the resilience of African banks, despite 77% of sub-Saharan banks citing economic conditions and 53% concerned with asset quality. Additionally, the EIB’s Climate Risk Scores show that Africa is one of the world’s regions most affected by climate risks, with 34% of banks reporting asset deterioration from extreme weather. Meanwhile, nearly 90% of African banks are now focused on developing gender strategies, noting better loan performance among women-led businesses.

EIB Chief Economist Debora Revoltella highlighted the role of development banks in supporting Africa’s dual goals of digital and climate resilience. With a gradual easing in financial conditions, the report points to ongoing challenges and opportunities for strengthening private-sector finance in Africa.

Background information

European Investment Bank (EIB) Global is the EIB Group’s specialised arm devoted to increasing the impact of international partnerships and development finance, and a key partner in Global Gateway. We aim to support €100 billion of investment by the end of 2027, around one third of the overall target of this EU initiative. With Team Europe, EIB Global fosters strong, focused partnerships, alongside fellow development finance institutions and civil society. EIB Global brings the Group closer to local people, companies and institutions through our offices around the world.

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SOURCE: European Investment Bank