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Finance - November 24, 2021

How will Embedded Finance Shape the Future of Africa’s Fintech Space?

With an estimated market value of over $138 billion in 2026, it’ll be interesting to see how embedded finance will drive innovations in Africa’s fintech space. 

Embedded finance is a mechanism that Africa’s fintech companies are integrating into their financial services. The incorporation of embedded finance will allow customers to have access to different financial services all from one app. In doing this, fintech companies partner with different third-party apps.

The Covid-19 pandemic, according to a report, made businesses reassess themselves and think of better ways to develop. This resulted in embedded finance, and according to a report, it is here to stay. With an estimated market value of over $138 billion in 2026, it’ll be interesting to see how embedded finance will drive innovations in Africa’s fintech space. 

Owing to the rise in embedded finance, Nigeria’s OnePipe, a fintech API company invested $3.5 million in embedded finance. According to a recent report, the founder and CEO Ope Adeoye said there is a need for the company to pivot as the initial integration with financial institutions is not yielding the expected demand cycles. Since the integration of this, 6.3 million transactions worth $46.3 million have been processed by OnePipe. The figures are from over a million individual accounts and 138+ different businesses ranging from fast-moving consumer goods (FMCG) and retail to lending and agriculture.

In the bid to expand, OnePipe entered into an agreement with Sendy, an African logistics and freight company in order to have access to other African countries. Adeoye said, “We did a deal with Sendy that made them participate in this round, and we will then deploy the capital for expansion. So as they go to Egypt, South Africa, we’ll be deploying with them and grow together”.

With regards to this, Aniko Szigetvari, the founding partner at Atlantic Ventures, said: “In our view, embedded finance is the next enabler for both traditional and financial service businesses to increase customer loyalty and revenue by offering a wide range of third-party financial products and revenue streams for their customers”. According to him, OnePipe is not only promoting financial inclusion in Nigeria but across the continent.

 

READ ALSO: Nigeria’s Central Bank to Regulate New Fintech Products

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