Africa, and particularly sub-Saharan Africa, is a region that has traditionally had limited access to formal financial services like credit, insurance, banking, and financial technology is currently enjoying considerable expansion in the FinTech industry. Many individuals in the area, especially low-income families, have profited from the possibilities this technology has made available in recent years, and they are increasingly employing FinTech technologies in more sophisticated ways.
One clever way Africans use FinTech is to make money, especially passive income. In this article, I will explore how you may utilize mobile money and FinTech to make passive income in Africa:
The emergence of mobile money and FinTech in Africa
According to a McKinsey report, FinTech has already made considerable inroads into the African industry, with typical penetration levels of 3 to 5 percent (excluding South Africa) and expected revenues of $4 billion to $6 billion in 2020. These values are similar to those of worldwide market leaders.
The COVID-19 epidemic has expedited current tendencies toward digitization and provided a fertile environment for new technological providers, although inflicting great misery and damaging lives and livelihoods throughout the continent. Fintech businesses are the fastest-growing start-up sector in Africa, and their success is being propelled by multiple factors, including improving network coverage, lowering internet prices, and rising smartphone ownership, as well as a youthful, quickly urbanizing population.
Africa’s population is predicted to continue adopting the expanding internet and mobile penetration as well as new digital banking, lending, insurance, and payment services. Because Africa has the second-fastest-growing payments and banking sector in the world and a population that is still primarily unbanked or underbanked, it is speculated that the continent’s demand for financial services will soon bypass conventional banking institutions.
Notably, a substantial number of indigenous FinTech businesses in Africa are based in South Africa, Kenya, and Nigeria, three tech hotspots in Africa. However, African FinTech enterprises typically operate inside their nation of origin or regionally, and as a consequence, Africa’s digital payment systems are extremely fragmented. This is due to the geographic concentration of FinTech in Africa, as well as its restricted but expanding access to funding and business scalability.
The rise of mobile financial services implies that FinTech has the potential to revolutionize financial inclusion in Africa. Demographic aspects in the area, including a big and fast-expanding population, a burgeoning middle class, and a particularly underdeveloped financial services industry, signal to investors that the region’s demand for digital financial technology is emerging.
The FinTech industry in Africa is maturing. Fintech is booming on the continent despite political, economic, and global pandemic challenges.
How to make passive income using mobile money and FinTech in Africa
There are a lot of options to make passive income with the booming FinTech business in Africa. I will mention the top 5 below:
1. Investing in digital savings and investment platforms
Several fintech businesses provide saving and investing choices to their users. Platforms like PesaPal, Flutterwave, and Paystack enable consumers to invest in digital assets like stocks, real estate, and other investment goods via their mobile applications.
Even if you choose not to or do not have the finances to invest, you may still earn a tiny income from the money you have in your savings. Using these services, you may put aside some monthly money in your savings or investment accounts, and see it increase automatically via interest and dividend payments.
2. Peer-to-Peer (P2P) Lending
Another emerging trend in the Fintech business is Peer-to-peer (P2P) lending, where people may lend money to others in return for interest. Platforms like Lendico, RainFin, and many more have arisen to make it easy to generate money via P2P lending. They provide a broad variety of lending methods, such as financing to small enterprises, microloans, or personal loans. You may withdraw the interest you earn or reinvest it into the site and earn more money.
3. Investing in Cryptocurrencies
The popularity of blockchain technology and cryptocurrencies is developing quickly throughout Africa, notably Nigeria, South Africa, Zimbabwe, Ghana, and Kenya. This is assisted by the widespread use of the internet, mobile money, and FinTech.
Read: How to invest in cryptocurrency
Cryptocurrency is one of the most popular techniques for generating passive income in Africa. It is strongly tied to FinTech in the sense that enterprises are now embracing cryptocurrencies as a form of payment instead of cash.
4. Mobile Money based microbusinesses
You may leverage mobile money and Fintech platforms to produce passive revenue by building small companies linked to them. For example, you may register as an agent for any of the FinTech platforms and make passive income via referrals and advertising.
You may even create a small mobile store (online or offline), and generate money by giving services like money transfer, bill payment, and airtime sales. These companies are straightforward to start up and typically need little day-to-day engagement from you, especially if you opt to develop an online shop.
5. Affiliate marketing
Affiliate marketing is an excellent means of making passive money, and it is particularly popular in the Fintech business. Fintech firms are seeking methods to promote their enterprises, and affiliate marketing is a very successful technique.
Read: How to make money through affiliate marketing
Fintech and mobile money in Africa is a thriving sector, therefore dabbling in affiliate marketing in the field is a terrific method to earn money as long as you have a big enough audience to promote to.
Conclusion
Fintech has transformed the way we make payments and earn money in Africa. As the industry develops and advances, more ways to earn passive income in Africa are becoming accessible. Take advantage of this chance and earn passive money now!
