- Africa has double the average rate of women-led fintechs
- From 2013 to 2021 less than 5% of $12.6 billion in funding to Africa’s tech startups went to fintechs led only by women
- Female techpreneurs face lower values and more oversight
Shocked at how little guidance was available for young
professionals like herself, Olaseinde began sharing her learnings in fun,
bite-sized tutorials on Instagram, and much to her surprise, her posts went
viral.
“I had no idea my page would just blow up,” said the
34-year-old by phone from Nigeria’s commercial capital, Lagos.
“Just like me, there were young people who wanted to know
how to manage their finances, but needed information in an easy-to-understand
way.”
Almost four years on, Olaseinde heads MoneyAfrica, an online
financial literacy portal providing courses from budgeting and currency risk to
inflation and treasury bills, and more recently also founded Ladda, an
app-based one-stop investment platform.
Collectively, the platforms have a 300,000-strong social
media community and more than 15,000 active users. MoneyAfrica is projected to
earn US$1mil (RM4.18mil) in revenue this year, said Olaseinde, and Ladda has
US$700,000 (RM2.92mil) in assets under management.
From digital payments, loans and insurance to share trading
and cryptocurrency, Olaseinde is among a growing number of female entrepreneurs
in nations such as South Africa, Nigeria, Kenya and Egypt taking a lead in
Africa’s fintech revolution.
Since pioneering mobile money services in the late 2000s,
Africa has become a hotbed for fintech – financial technology – innovation with
an explosion of startups vying to tap the region’s unbanked millions.
Last year, fintech companies attracted more than 60% of the
nearly US$5bil (RM20.92bil) in investments to African startups, according to
market intelligence and research firm Briter Bridges.
For female entrepreneurs, however, getting their innovations
off the ground is often hampered by gender biases that stifle their ability to
access finance, gain exposure and grow their businesses, industry experts and
women founders said.
From 2013 to 2021, less than 5% of the total US$12.6bil
(RM52.73bil) in funding to Africa’s tech startups went to all-female founding
teams compared with 82% to all male-ones, data shared by Briter Bridges showed.
Breaking into the ‘boys’ club’
But while the sector is very much a “boys’ club”, research
shows Africa's fintech sector fares better than other regions when it comes to
women at the top.
Around 3.2% of fintech firms in Africa are founded solely by
women – double the global average of 1.6%, according to Findexable, a market
research company that tracks gender diversity.
The continent’s fintechs also have more female board members
compared with other regions, Findexable’s 2021 data shows.
Trailblazers include Kenya’s Jihan Abass who founded
Nairobi-based Lami Technologies in 2018, aiming to boost almost non-existent
insurance coverage among Africans.
“I became interested in insurance after having a
conversation with a waiter who told me how he didn’t have medical insurance,”
said Abass, 28, a former commodity futures trader at a London trading house.
Lami’s application programming interface, or API, enables
businesses to offer flexible digital insurance products such as vehicle and
health insurance to customers.
Through its API, users can get a quotation for motor,
medical, or other insurance products in seconds, then customise the benefits
and adjust the premium to suit their needs and get their policy documents
instantly.
Since inception, Lami has raised more than US$1.8mil
(RM7.53mil) in seed funding and partnered with companies including Kenya Commercial
Bank and e-commerce platform Jumia to sell more than 72,000 policies.
Lami now operates in Malawi and the Democratic Republic of
Congo as well as Kenya, and also runs Griffin, a car insurance app fully built
on the startup’s API.
Another female-led API fintech company is Lagos-based Okra,
co-founded by Fara Ashiru Jituboh.
Launched in 2020, Okra aims to digitise financial services
for Africa. Okra has built an open finance platform that enables developers and
businesses to build personalised digital services and fintech products for
customers.
“Essentially, we play the ‘middleman’ by enabling
individuals and businesses to connect their bank accounts directly with
third-party applications in real-time,” said Jituboh, 33, a former software
engineer.
In less than two years, the startup has drawn more than 400
clients, including more than 20 banks in Nigeria, Kenya and South Africa, and
has raised US$4.5mil (RM18.83mil) in venture capital.
But despite such success stories, many female fintech entrepreneurs
struggle to attract investment.
Funding gap
The stark funding gap between male- and female-led startups
in the sector is often attributed to the shortage of female “techpreneurs”, but
some industry experts disputed this.
“It’s nonsense for investors to claim that there aren’t any
women entrepreneurs in fintech to invest in,” said Martha Mghendi-Fisher,
founder of African Women in Fintech and Payments, a non-profit with a network
of thousands of members.
“Investors are simply not looking hard enough.”
Female fintech founders said that even when they do have the
opportunity to pitch to venture capital (VC) firms, gender biases mean they
often raise less and receive lower valuations.
“I don’t think it helps that the majority of VC panels tend
to be men who are white and much older,” said Faith Mokgalaka, founder of
Johannesburg-based Puno, a digital platform enabling farmers to sell shares, or
a portion of their next harvest.
“They aren’t openly sexist, but you do feel there is more
scrutiny on you compared to men. More questions are asked, additional
documentation and due diligence is required,” added 22-year-old Mokgalaka.
A recent study cited by Findexable estimates that white men control
93% of venture capital dollars.
An increasing number of accelerators – which provide
early-stage companies with training, mentorship and financing – and venture
capital firms are now shifting focus to women-led businesses.
The Catalyst Fund, an accelerator working with inclusive
tech innovators, has supported 61 companies – more than one-third of them
founded by women.
Maelis Carraro, the fund’s managing director, said investors
need to rethink how they interact with female entrepreneurs.
“The whole setup in the VC space such as the Q&A, the
aggressive pitching, the need to demonstrate over-confidence has to change,”
said Carraro. “We need to make the whole conversation more inclusive.”
More diverse VC boards, programmes to encourage girls to
pursue STEM careers and initiatives celebrating successful women founders would
inspire others and foster a more supportive environment, entrepreneurs said.
“It’s a ‘tech bro’ environment, for sure,” said Delila
Kidanu, 26, co-founder of Koa, an app-based savings and investment platform in
Nairobi.
“It would be important to have some training on gender
biases so that people can realise how their actions and decisions can adversely
affect women entrepreneurs.” – Thomson Reuters Foundation