Impact of Covid-19 on African Fintech Companies

Covid-19 pandemic has created a great impact on every industry whether it's about startup funding or growing them in the market. Funding conditions have been shifted rapidly and the future of Fintech has changed dramatically.
Talking about the African Fintech start-ups than the last three years were rising for them as they received more investment than any other sectors. But the scenario has been completely changed.
African Fintech smashed funding records in 2019 with 311 start-ups securing US$ 490 million worth of investment, according to the annual African Fintech start-ups funding reports.
Tomi Davies, President of the African Business Angel Network (ABAN) said that economic fall due to COVID-19 has increased the challenges with access to revenue and capital funding for technology ventures.
Total deals to Fintech companies fall about 30% as investors appetite for Fintech financing slowed and over 80% of start-ups are expected to fall as a result of the recession. For general understanding, all companies have to adopt a new climate of providing a remote working and all other necessities to work under such conditions.
Fintech companies that rely on field agents or staffs, it will be tough for them to adapt fully.
Financing for African report finds a total of 57 African Fintech start-ups raised over US$ 92 million in funding between the beginning of 2015 and even of May 2017, which has already been reduced due to the pandemic.
Though Tala has established the Covid-19 rebuilt fund to support small businesses providing essential services to their communities like health and care, food, education, related logistics and that too with 0% interest loans.
Apart from the impact of Covid-19 on the African Fintech start-ups which are trying to cope up and adjust themselves according to the current scenario, the government especially South African government has done a great job showing unified leading during the crises.
"I expect it to have a negligible impact on effected start-ups and the SME sector in general". Said by the government.
For all the challenges, African Fintech start-ups and ecosystem support players are reacting. During all the crises, the supporters are reacting admirably to the crises by contributing with products and that too with 0% interest loans.
According to the officials when the crises end then the market is going to recover faster. And also this Covid-19 must be an opportunity for all the business and especially startups as they will learn and become more sustainable. They can use it to eliminate waste and inefficiency and develop capabilities to survive in the post COVID world.

Thank-you