FinTech in Africa: Beyond Mobile Payments

The Success of Mobile Payments

The massive adoption of mobile payments in Africa is explained by a particular context. The traditional banking network poorly covers the continent. Branches are rare, fees are high, and procedures are burdensome. The mobile phone has become the primary point of access to finance for hundreds of millions of people.

M-Pesa, launched in 2007 in Kenya by Safaricom, led the way. The model relies on a network of physical agents — shops where users deposit and withdraw cash. The phone becomes a digital wallet, accessible without a bank account. Other players followed: MTN MoMo in several countries, Wave in Senegal, PalmPay and OPay in Nigeria, Chipper Cash across multiple markets.

These platforms have enabled millions of people to enter the formal financial system. Person-to-person transfers, bill payments, and everyday purchases became possible without going through a bank. But this first wave mainly solved the transaction problem. Credit, structured savings, and insurance remain largely out of reach.

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The Limits of Transactional Inclusion

More than 60% of equity financing in African FinTech is concentrated on payments and loans. Other financial services remain underdeveloped. More than 50% of loans still flow through semi-formal or informal channels, even in mature markets like Kenya or Ghana. Community savings associations (tontines) and local lenders remain the norm for a large portion of the population.

Credit for small and medium enterprises (SMEs) illustrates this gap well. SMEs represent approximately 80% of employment in sub-Saharan Africa, but they have limited access to formal financing. Traditional banks consider them too risky and too costly to serve. Payment FinTechs have not yet filled this void.

The question of interoperability also arises. In many countries, M-Pesa users cannot send money directly to a Wave or OPay user. Systems operate in silos. This limits the fluidity of exchanges and maintains market fragmentation that slows the adoption of more advanced services.

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The Second Wave: Credit, Investment, Insurance

A new generation of companies is seeking to go beyond money transfers. Funding for African startups rebounded in 2025, with $3.2 to $3.9 billion raised across 506 transactions. Kenya ranked first with $1.04 billion (+72% year-on-year), followed by South Africa ($715 million, +21%) and Egypt ($604 million, +37%). In Nigeria, the FinTech sector grew by 70% in 2025, and digital lenders disbursed $865 million.

Micro-insurance is a concrete example. Health or agricultural insurance products, distributed via mobile phone and charged a few cents per day, are beginning to appear. They target populations that have never had access to formal insurance. The insurance market on the continent, valued at $610 billion in 2025, is expected to reach $680 billion in 2026.

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The Data Paradox

The explosion of mobile payments has generated a considerable amount of transaction data. This data could be used to assess the creditworthiness of borrowers, particularly those without a formal credit history. In practice, several obstacles hinder this transformation. Traditional credit bureaus are weak or non-existent in many countries. Data on SMEs is fragmented and poorly structured.

In Tanzania, the Manka platform, developed by FinTech Tausi Africa, uses AI to assess borrower creditworthiness from non-banking data, while integrating mechanisms to correct algorithmic biases. In Nigeria, more than 1,500 lending applications were available in mid-2025, but fewer than 300 had official approval from the Central Bank. This gap illustrates the tension between rapid innovation and the need for a control framework.

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Regulation as a Lever

Regulation is a determining factor for the future of FinTech in Africa. International examples demonstrate this. Brazil's PIX system attracted 140 million users in three years thanks to a public instant payment infrastructure and clear rules. India's UPI is used by more than 300 million people.

In Nigeria, the Central Bank (CBN) published its FinTech 2025 report, which includes a roadmap for open banking, expansion of regulatory sandboxes, and the establishment of "passporting" agreements with other African countries. Initiatives such as the Pan-African Payment and Settlement System (PAPSS), launched by the African Union, aim to enable instant transfers in local currency between African countries.

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From Innovation to System Building

The first phase of African FinTech was driven by the speed of startup innovation. The next step will depend more on institutional choices and collaboration between different actors.

To move from transactional inclusion to sustainable financial depth, several priorities emerge: building interoperable payment infrastructures between countries and operators, establishing data-sharing systems for credit, harmonizing regulation at the regional level, and strengthening local capital markets.

Africa has demonstrated its capacity to innovate in payments. The question now is whether it can build a complete financial system capable of serving the hundreds of millions of people and businesses that remain on the margins of formal credit.