Rand Merchant Investments on fintech trends to watch in 2022

Funding for African Fintech skyrocketed to $2 billion in the past year, a significant increase from $500 million in 2020. The surge in funding can be attributed to the pandemic, which accelerated consumer adoption of financial technology services. To delve deeper into the sector and identify trends for 2022, CNBC Africa interviewed Dominique Collett, Senior Investment Executive at Rand Merchant Investments and the Head of Alpha Code. Collett highlighted three key drivers behind the growth of Fintech funding in Africa. First, the global trend of increased funding for Fintech due to low interest rates and the attractiveness of venture capital investments. Second, the maturation of the Fintech sector in Africa with the emergence of solid businesses led by seasoned entrepreneurs. Third, international investors recognizing the vast untapped potential in Africa's financial services market. Collett noted that Africa produced three Fintech unicorns last year, including Flutterwave and MFS Africa. These unicorns are a testament to the continent's growing prominence in the Fintech space. Collett also discussed the entry of mobile network operators (MNOs) into the Fintech sector, with companies like MTN and Vodacom venturing into banking services. While MNOs have dominated Fintech in other regions, their impact in South Africa remains to be seen due to the country's strong banking sector. Collett touched on the successful listing of a SPAC by South African executives in the US market, showcasing the increasing appetite for African Fintech investments globally. Looking ahead to 2022, Collett predicted continued growth in the Fintech space despite potential global cooling in funding. The accelerated adoption of digital financial services during the pandemic has solidified the importance of Fintech in serving underserved markets in Africa, ensuring sustained growth in the sector.