The rising tide of fintech in Africa — unleashing opportunity in Somalia
By Ahmed Yuusef, CEO of Hormuud Telecom
The fintech market is taking Africa by storm, with recent research from McKinsey forecasting African fintech markets to reach $150 billion by 2025. As funding opportunities and supportive regulatory frameworks are implemented, it is clear that fintech is facilitating a financial revolution in Africa.
Africa’s fintech boom can be attributed to trends including increased smartphone ownership, the expansion of reliable network connectivity, and declining internet costs — now making financial services accessible to millions of people who were previously unbanked.
Digital payment platforms like mobile money leave less room for error (e.g. typing the wrong USSD code) and reduce reliance on outdated systems. And they are more affordable — fintech transactional solutions can be up to 80% cheaper than the traditional players.
And looking forwards, the digital economy is starting to be driven by the young, tech-savvy, urban population that is rapidly growing — 60% of Africa’s population are below 25 years old. So, the opportunities for business innovation for the whole continent are endless.
However, the growth of the African fintech sector comes with its own set of challenges, like navigating the complex and evolving regulatory frameworks that are essential to mitigating fraud and data privacy risks. And continuing to tackle infrastructure gaps — including unreliable power supplies and digital financial literacy issues.
In Somalia, we are fast on our way to becoming a cashless society, with two-thirds of the population already using mobile money. I see the potential of fintech in helping us to reach our rural communities, increase financial inclusion, and drive long-term economic stability and prosperity.
The fintech market has its own unique presence here — with an estimated two million Somalis living abroad, and diaspora members sending approximately $1.6 billion in annual remittances a year, fintech platforms are a major enabler of cash flow into the country.
And as an agricultural nation, we can leverage fintech to address the financing needs of smallholder farmers and livestock keepers. Innovative lending platforms, crop insurance, and marketplaces can connect farmers with financial institutions and buyers.
At Hormuud Telecom, we’ve been at the forefront of innovation in Somalia for decades — we deliver new services to meet changing digital and consumer needs. That’s why we launched the Waafi app in 2021, it offers an integrated mobile money experience — allowing users to access bank accounts, transfer money, share international remittances, and make phone calls.
Africa’s fintech sector has emerged as a transformative force, driving financial inclusion and economic growth. But it is integral that we build a strong regulatory environment and continue to improve digital infrastructure.
I believe that fintech can unlock the full potential of Somalia — accelerating its path towards sustainable development, and empowering all Somalis, including our last-mile communities, to be active participants in the digital economy.
