African fintech took one-third of the funding injected into startups on the continent in 2017, and 2018 has followed suit with big ticket deals such as Nigeria-based Paga’s $10 million funding for international expansion led by the Global Innovation Fund.
African fintechs are popular due to the sheer necessity of their services.
While in developed markets fintechs are disruptors, in Africa they are building technical infrastructure from scratch.
Established in 2012, Paga plugs the gap for financial services for mass consumers, since only 25 million out of Nigeria's 180 million population have bank accounts.
Paga makes it simpler to carry out payments via its digital platform which works on iOS, Android, and basic USSD phones.
Its 6 million customers choose to make payments through apps, simple codes punched into basic phones, or its network of 11,000 agents — a core advantage since Nigeria's 21 banking chains only have 5,000 branches and 900 non-branch ATMs.
Most people use Paga to send money to each other or to pay utility bills. This is a little bit different from M-Pesa, which is heavily used for m-commerce.
5,000 merchants and businesses use Paga for transactions and it makes most of its money on merchant payments, bank-to-bank transfers, and selling airtime and data.