The advent of fintech in Kenya’s financial landscape is rapidly changing the face of doing business among Kenyans and beyond. Financial inclusion is being enhanced through mobile money banking, payment solutions, and digital lending, making Kenya a spotlight for new and emerging fintech across the globe. Fintech companies like M-Pesa and Pesapal, are among the dominant companies in this sector..
Disrupt Africa, in its 2023 report, pointed out that Kenya alone is home to about 15% of Africa’s fintech companies finteching in Africa. To get a better view of fintech in Kenya, the innovation started in 2006 when M-Pesa, a leading payment platform, came to offer financial inclusion to Kenyans, especially underserved rural people. This led to an increase in financial inclusion among Kenyans from 26% in 2006 to 84% in 2023, fostering economic growth, gender equality, and more.
The Kenyan government’s strong support for fintech through nationwide promotion and laying down regulatory frameworks, such as the enactment of the National Payment System Act and Digital Blueprint, coupled with increasing internet access rates, has enabled a friendly environment for fintech companies. A high taste for technology among citizens has enhanced the use of mobile phones and, hence, access to fintech platforms.
The impact of fintech on the Kenyan economy cannot be overemphasized. Safaricom, the mother company of M-Pesa mobile money, contributes about 5% to Kenya’s total GDP. According to Fintech News Africa, a report cited from the Kenyan Startup Ecosystem Report 2022 indicates that at least 308 tech companies sprang up in Kenya by November 2022.
It is for these reasons and more that Kenya, though an emerging fintech economy, has become an attractive partner to international companies and organizations. Kenya’s fintech industry has become an example for other countries around the world Today, M-Pesa is used by many who live beyond Kenya.
However, the Kenyan fintech sector is not without challenges. The government and other stakeholders must ensure the protection of users of fintech by ensuring cybersecurity and curbing money laundering and terrorism financing issues. There must be drastic investment in digital infrastructure to foster continued growth in the fintech sector.
