…understanding the venture-capital freeze
By Joseph Benson
Global venture-capital investment has contracted sharply, but Africa’s digital-finance sector is proving unusually resilient, drawing investors toward mobile-money infrastructure, RegTech, credit-analytics and AI-driven financial inclusion. As Ghana strengthens its digital-finance architecture, the continent’s fintech story is shifting from rapid expansion to disciplined reinvention; and the implications are profound.
When Capital Tightens and Innovation Shifts
The past three years have reshaped the relationship between global investors and emerging-market technology. Venture capital, once abundant and aggressive, has tightened considerably. High interest rates and weaker risk appetite have slowed deals worldwide, forcing start-ups to rethink growth models and investors to reevaluate their strategies. Yet within this global recalibration, one pattern stands out: fintech in Africa has not collapsed; instead, it has evolved.
The sector continues to attract a disproportionate share of capital because it addresses structural needs; payment systems, identity verification, credit assessment, compliance automation and transaction security, that remain essential regardless of economic cycles. In a global environment where capital is scarce, only business models with clear utility and path-to-scale survive, and African fintech increasingly fits that description.
This recalibration raises urgent questions for policymakers, investors and entrepreneurs. If the era of abundant VC funding is over, what replaces it? And how do countries such as Ghana position themselves to lead the next chapter of Africa’s fintech story
The Global VC Slowdown: A Reset, Not a Collapse
The contraction in global venture funding since 2022 has been broad and sustained. Worldwide VC investment fell by more than 40 percent between 2021 and 2023, according to CB Insights and PitchBook, driven by higher interest rates, tighter liquidity conditions, and a sharp decline in late-stage mega-deals. Early estimates for 2024 point to a continued pullback as investors rotate from aggressive expansion to capital preservation, a pattern echoed in OECD and IMF financial-stability reports. African ecosystems, though accounting for less than 1 percent of global VC flows, have not been insulated from this re-pricing of risk.
Yet the data also reveals a more nuanced trend: fintech continues to stand out as the continent’s most investable vertical because it addresses structural market failures that public institutions and legacy banking systems have struggled to resolve. Digital payments, identity verification, SME credit modelling, and fraud analytics are not peripheral innovations; they function as economic infrastructure. When capital becomes scarce, investors gravitate toward sectors with proven demand, scalable unit economics, and regulatory alignment; and fintech, more than any other African tech
FinTech’s Resilience: Africa’s Counter-Cyclical Sector (Expanded)
Why does fintech remain so prominent? First, Africa has the world’s highest mobile-money penetration rate, with more than 180 million active mobile-money wallets and over US $1.3 trillion in transaction value recorded in 2023, according to GSMA’s annual State of the Industry report. This scale is not simply impressive; it signals that digital wallets have become the continent’s de facto banking infrastructure, often substituting for physical branches in both urban and rural markets. Second, demographic and economic conditions continue to widen the addressable market: a rapidly urbanizing population, limited formal credit access, a median age below twenty, and rising smartphone adoption all reinforce demand for low-cost, technology-enabled financial services.
Even as global venture capital flows contracted in 2024, fintech still accounted for roughly one-third of all disclosed equity deals in Africa, based on investment data compiled by AVCA and Briter Bridges. The consistency of this share underscores a deeper structural reality: investors view digital finance as a platform sector, a foundational layer that enables other industries, from e-commerce and agritech to transport logistics and health delivery, to scale efficiently. In uncertain capital cycles, businesses that anchor wider economic activity tend to attract relatively more investment, and African fintech continues to demonstrate that resilience.
Ghana’s Digital-Finance Ecosystem: A Quiet Strength
Amid Africa’s shifting investment landscape, Ghana has emerged as one of the most trusted and well-regulated digital-finance environments. Its success rests on a combination of clear regulatory frameworks, high user adoption and a competitive ecosystem among mobile-money operators, commercial banks and emerging fintech platforms.
Mobile-money transactions continue to exceed GHS 1 trillion annually (Bank of Ghana, 2023), with the Electronic Money Issuer Guidelines and Payment Systems Act creating a governance architecture that balances innovation with systemic stability. The Bank of Ghana’s Regulatory Sandbox further accelerates experimentation in micro-lending, digital KYC, RegTech and cross-border payments.
Ghana’s fintech ecosystem is also becoming more sophisticated. Start-ups are integrating AI for fraud detection, behavioural credit modelling, merchant risk scoring and transaction anomaly alerts. Banks and mobile-money operators are adopting machine-learning tools for AML compliance, while digital-credit firms use AI-driven risk engines to expand lending to SMEs and informal workers.
This convergence; strong regulation, high adoption, and increasing AI integration, makes Ghana an important reference point for the continent’s next fintech chapter.
The Architecture of Africa’s FinTech Reinvention
Payments: From Volume to Value
Africa’s payments landscape, once driven by rapid user acquisition and rising transaction volumes, is now entering a more sophisticated phase. The priority has shifted toward value creation through merchant services, interoperable QR ecosystems, instant payment rails and cross-border harmonization. Ghana’s rollout of GhanaPay and the universal QR code exemplifies this transition, reflecting a regulatory commitment to efficiency and inclusion.
Across the continent, central banks are pursuing interoperability frameworks to lower transaction costs and expand financial access; the IMF and World Bank note that such harmonized payment systems are among the most powerful catalysts for digital-economy growth in emerging markets. As payment infrastructure matures, fintechs are increasingly judged not by scale alone but by their ability to provide liquidity, productivity gains and meaningful financial integration.
Credit Scoring and SME Finance
Access to credit remains one of Africa’s most binding economic constraints; only about 7 percent of SMEs obtain formal bank financing, according to the IFC. AI-enabled alternative credit-scoring models are beginning to loosen this constraint by analyzing behavioral signals, mobile-money histories, utility-payment patterns and platform-transaction records. These tools help lenders assess risk where collateral is scarce, expanding credit markets that traditional banking has struggled to serve.
Boston Consulting Group estimates that fintech-enabled lending could exceed US $10 billion by 2030 if data-sharing frameworks deepen and supervisory standards evolve in tandem. The implication is clear: financial inclusion will increasingly depend on the quality of data governance, not only the availability of capital.
RegTech and Compliance
RegTech is emerging as the quiet backbone of Africa’s digital-finance systems. As fraud patterns evolve, particularly in mobile-money environments, machine-learning analytic tools now support real-time anomaly detection, customer-verification processes and automated reporting, reducing losses and strengthening institutional trust.
Ghana has positioned itself as one of the region’s more proactive regulatory environments. The Bank of Ghana’s cybersecurity directives, electronic-money regulations and enhanced KYC and AML requirements have pushed providers to adopt sophisticated compliance architecture, accelerating the uptake of AI-driven tools that safeguard consumers while protecting system integrity.
FinTech in a Tightening Global Economy: Where the Next Frontier Lies
With venture-capital liquidity reduced worldwide, Africa’s fintech sector is entering a period of consolidation and disciplined growth. The winners will be firms that demonstrate clear revenue pathways, defensible IP, and strong alignment with regulatory priorities.
For Ghana, the opportunity lies in focusing on niches where it can lead regionally:
- AI-driven credit scoring for SMEs
- Fraud analytics and cyber-risk monitoring
- RegTech compliance platforms
- Cross-border payment systems for West Africa
- Digital-identity verification linked to national systems
These capabilities can be exported across the sub-region, especially as ECOWAS revisits digital-market integration and harmonized payment frameworks.
The Human Capital Question: Skills That Will Define the Next Decade
Fintech’s evolution demands new talent. Data scientists, AI engineers, cybersecurity analysts, cloud-infrastructure specialists and digital-product designers are becoming essential to financial-sector competitiveness. Ghana’s universities and technical institutions have begun adjusting curricula, but the pace must accelerate.
Global experience shows that thriving fintech ecosystems rely on talent pipelines as much as capital pipelines. Rwanda’s software-engineering partnerships, Kenya’s coding accelerators and Nigeria’s product-management hubs provide useful analogies. Ghana’s challenge, and opportunity, is to scale similar programs in partnership with industry.
Conclusion: Reinvention, Not Retreat
Africa’s fintech story is no longer defined by hyper-growth fuelled by abundant venture capital. The new phase is more intentional and grounded in fundamentals, regulation, market need, infrastructure reliability, and sustainable revenue models.
Ghana sits at the forefront of this shift. It has built one of the continent’s most credible digital-finance environments and is now poised to lead in applied AI, regulatory innovation and SME-focused financial inclusion. Global capital may be tightening, but the structural demand for digital finance — and the ingenuity of African entrepreneurs, remains strong.
If the next decade belongs to fintech ecosystems that combine resilience, regulatory clarity and technological sophistication, Africa’s reinvention begins now, and Ghana is well positioned to shape it.
Joseph Benson is a visionary entrepreneur, business development consultant, and philanthropist based in the United States.
The post Africa’s FinTech slowdown or reinvention? appeared first on The Business & Financial Times.
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