Scaling Africa’s fintech to bridge financial inclusion gaps and boost SMEs

Introduction: Fintech as Africa’s Economic Equaliser

Across the African continent, millions of people still lack access to basic financial services: credit, savings, insurance, and digital payments. This financial exclusion limits economic growth, deepens poverty, and stifles the potential of small and medium-sized enterprises (SMEs), which form the backbone of Africa’s economies.

Yet, despite this challenge, fintech has emerged as one of Africa’s most promising and transformative sectors. From mobile money in East Africa to digital lending platforms in West Africa, African fintechs are reshaping the financial landscape and expanding economic participation.

Africa must scale its fintech revolution with intention, collaboration, and innovation to fully bridge the financial inclusion gap and power the next wave of SME growth.

The Financial inclusion imperative

According to the World Bank, nearly 45 percent of adults in Sub-Saharan Africa remain unbanked, compared to just 6 percent in high-income economies. Most of these individuals live in rural areas, work in the informal sector, or operate in cash-only environments. Women and youth are disproportionately excluded.

The credit gap is even more striking for SMES. The International Finance Corporation (IFC) estimates that African SMEs face a $330 billion annual financing shortfall, restricting their ability to expand, hire, and innovate.

Fintech holds the key to changing this reality. With mobile penetration exceeding 80 percent across many African countries, digital finance platforms are reaching communities and entrepreneurs that traditional banks have ignored for decades.

“Africa must scale its fintech revolution with intention, collaboration, and innovation to fully bridge the financial inclusion gap and power the next wave of SME growth.”

How fintech is transforming Africa’s financial ecosystem

1. Mobile money and payments

Mobile money, pioneered by platforms like M-Pesa in Kenya and now widely adopted in Ghana, Nigeria, Senegal, and beyond, has revolutionised how Africans save, spend, and send money. It offers a gateway to broader financial services and is especially impactful in rural and low-income communities.

2. Digital lending for SMEs

Startups like Carbon, Branch, FairMoney, and Tala offer short-term, low-collateral loans to individuals and micro-enterprises using alternative data—such as mobile usage, transaction history, and social behaviour—to assess creditworthiness. This is a game-changer for small businesses traditionally excluded from formal credit systems.

3. Crowdfunding and peer-to-peer platforms

Fintech platforms are enabling SMEs to access capital through community-driven models. Platforms like ThriveAgric, FarmCrowdy, and StartCredits allow users to invest in local businesses, especially agribusiness and creative industries, bypassing conventional financial gatekeepers.

4. Digital savings and microinsurance

Apps like PiggyVest and Cowrywise in Nigeria help young Africans build savings habits through automated deposits. Fintechs like Inclusivity Solutions are bundling insurance with mobile payments to protect farmers, traders, and workers against health and climate risks.

5. Blockchain and cross-border payments

Cryptocurrency and blockchain platforms are reducing remittance fees and improving speed in cross-border trade, which is vital for SMEs operating within the African Continental Free Trade Area (AfCFTA). Platforms like Chipper Cash, Yellow Card, and BitPesa lead in low-cost, real-time transfers.

Scaling fintech for greater impact: Strategic priorities

To unlock the full potential of fintech for financial inclusion and SME development, Africa must address several key areas:

1. Regulatory Harmonisation

Fragmented policies and inconsistent licensing regimes across African countries create barriers to scaling fintech solutions. Governments and regional bodies must work towards interoperable, risk-sensitive, and innovation-friendly regulatory frameworks, especially within AfCFTA.

2. Infrastructure investment

Digital finance cannot thrive without foundational infrastructure. Investment in broadband connectivity, reliable power, cloud infrastructure, and digital ID systems is critical to reaching remote communities and enabling digital onboarding for SMEs.

3. Public-private partnerships

Governments should partner with fintech innovators to digitise public services, provide conditional cash transfers, support agricultural value chains, and formalise the informal sector. Examples from Ghana’s mobile money tax collection and Rwanda’s e-tax platforms highlight what’s possible.

4. Financial literacy and trust building

Access alone is not enough—users must understand and trust digital platforms. National campaigns to promote financial literacy, cybersecurity awareness, and digital skills are essential, especially for women and rural entrepreneurs.

5. Capital and talent support for fintech startups

Africa must cultivate a pipeline of homegrown fintech startups through incubators, accelerators, and local venture capital. Governments can incentivise fintech investment through tax credits, seed grants, and co-investment models. Diaspora capital and African Development Bank (AfDB) programs can play a catalytic role.

The role of fintech in empowering SMEs

Fintech is not just about banking; it’s about building a new infrastructure of economic inclusion. For SMEs, fintech offers:

• Access to working capital through digital loans

• Cash flow management via mobile payment integration

• Digital bookkeeping tools for financial visibility

• E-commerce enablement for market access

• Cross-border payments for regional trade

These tools are not luxuries; they are lifelines determining whether a business grows or fails.

Case in point: Nigeria’s fintech growth story

Nigeria’s fintech sector, valued at over $3 billion, has become a continental leader. With over 200 active startups, Nigeria is home to unicorns like Flutterwave, Paystack, and Interswitch, which are redefining how money moves across Africa.

These firms build local solutions and expand across borders to support intra-African commerce under AfCFTA. Their success demonstrates that scaling fintech is possible with the right talent, policy, and investment environment.

Conclusion: From fragmentation to inclusion

Fintech is Africa’s bridge from financial exclusion to economic inclusion, from informal trade to formal growth, and from isolated communities to integrated markets.

If we scale it wisely, we can empower millions of young people, women, and small business owners to participate fully in Africa’s economic rise. Fintech is not just a sector but a strategic lever for inclusive development, regional integration, and long-term prosperity.

The future of African finance is digital, inclusive, and homegrown. Let us build it together.

 

Prof. Lere Baale, CEO, Business School Netherlands International

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