Impact of Wealth Tech on African Finance Sector

Real Problems, Real Builders, Real Progress ➖ that’s the Africa Fintech Story and more people need to hear and see it! If global capital knew the real cost of overlooking Africa’s builders, it would invest differently (or at least that’s what I hope)…… On this week’s Couchonomics with Arjun , I’m joined by Yustus Aribariho MBA, Co‑Founder of Furaha Financial, to explore why Africa’s fintech boom still struggles to attract the scale of capital it deserves - and why that’s a missed economic strategy, not just a missed deal —————— Here’s the reality check in numbers: ❌ Funding is tight while usage explodes. African startup funding in 2024 came in at US$3.2B (equity + debt)- down on prior years as global VC tightened ✅ Meanwhile, mobile money processed US$1.68 trillion in 2024 across ~108 billion transactions. The pipes are busy; the capital pipes aren’t 🤷🏽♂️ ❌ Cost of moving money is still too high. Sending remittances into Sub‑Saharan Africa cost ~8.78% on average in Q1‑2025 an unnecessary tax on families and small businesses that policy can help fix ✅ Demographics are destiny - if funded. Nearly 60% of Africa’s people are under 25. Talent isn’t the bottleneck; corridors and capital are 🤷🏽♂️ —————— Furaha’s mission is simple but powerful and foundational: 🌍 Education & household loans for underserved families 💡 Fintech‑driven access to affordable credit 🤝 Backed by SC Ventures by Standard Chartered (the bank’s innovation arm) Why I’m excited about this venture: education finance compounds fees paid on time → attendance → attainment → productivity gains for decades. Their impact is not another “feature”; it’s nation‑building! —————— What Yustus and I got into: 💸 Why global investors still hesitate to back African fintech at scale—and what blended/local‑currency capital could unlock 📱 What mobile money really teaches us about infrastructure‑led innovation, not app‑led hype 🏦 How regulatory hurdles and repatriation slow capital movement—and what sandboxes and clear FX rules can fix 👥 Why youth and human capital may be Africa’s strongest export over the next decade This isn’t just about Africa. It’s about the next chapter of financial inclusion, capital flows, and innovation worldwide and the foundational sectors (like education) that amplify everything else 👉 Don’t just watch Africa’s story unfold—learn why you should be part of it —————— 🎧 Episode now live on YouTube Spotify & Apple Podcasts Thanks to our Season 4 partners: Adyen Mastercard Thunes Digit9 SC Ventures by Standard Chartered HALA #CouchonomicsWithArjun #Africa #FinancialInclusion #FutureOfFinance #Furaha Ian | Alex | Gautam | Asmik | Dmitri | Panagiotis | Efi | Kelvin | Dr | Tristan | Ali | Marcel | Linas | David | Tammer | Gozde | Sepo | Sitoyo | Mohammed | Varlam

🔴 In Africa, Uber lost to the boda driver with a phone number you can actually call. That's not a failure of technology—it's a masterclass in what truly drives financial inclusion. In a recent FS i-Hub session with Hugo Pacheco - The Barefoot Economist and Rob Sanford, CEO of SafeBoda (mobility fintech super app), revealed something profound: in markets where 80% of workers are informal and trust is scarce, embedded finance isn't about APIs—it's about understanding people. The conversation cut through the hype: 📍 Platforms aren't just apps—they're economic infrastructure 📍 Financial wellness comes before financial growth 📍 Trust beats speed in low-trust environments ‣ Rob's insight hit home: "Traditional banks can't underwrite a boda driver—but we can, because we know their work, income patterns, and ambitions." SafeBoda doesn't just move people. It embeds insurance, vehicle loans, land credit, and same-day payouts directly into daily work. Drivers repay loans through rides, build credit histories through activity, and move from instability to asset ownership. This is what financial inclusion looks like when it's designed from the ground up—not imported from the top down. Key insights from the session: • Local platforms win because they build trust through human support, not just technology • Embedded finance works when it's lived daily, not layered on afterward  • Africa needs 12 million new jobs yearly—platforms are filling the gap that formal systems can't • Smart regulation should enable platform innovation, not strangle it Hugo brings us conversations that challenge conventional wisdom and spotlight what's actually working in African fintech—not what sounds good in boardrooms. Because the future of work and finance in Africa won't be written by those chasing global playbooks. It will be built by those who understand local realities. 👇 Read the full insights from the session  🎥 Watch the replay (link included in the article) What's your take? Can global platforms ever truly compete with locally-rooted solutions in emerging markets? #Fintech #Africa #superapp #FSiHub

After reviewing more pitch decks these past few days, I see African fintech founders are still flogging the dead horse that is "banking the unbanked" as a lazy fundraising pitch. From Yaounde to Cape Town, it’s the same story, another mobile wallet, payments app, another promise to bring financial inclusion to the masses. Truth is: most Africans are not unbanked because they lack access; they’re unbanked because they lack income. A new app won’t change that. The Brutal Truth Lack of Disposable Income – People don’t need more fintech solutions; they need more money. Without increased economic productivity, most “financial inclusion” solutions remain useless. Broken Unit Economics – Many fintechs rely on unsustainable VC fueled growth, acquiring “users” who don’t generate revenue. Regulatory Capture & Infrastructure Gaps – Governments protect banks and telcos dominate mobile money. The real bottlenecks are systemic, not just about "access." Startups often underestimate how slow, expensive, and political it is to scale across markets. Real Problems & Better Solutions Income-Generating Fintech – Instead of just moving money, fintech should help people make money. Platforms enabling gig work, SME financing, and export-focused businesses can drive real financial inclusion. A fintech that helps informal traders access larger markets, rather than just helping them "save." Decentralized Credit & Alternative Lending – Traditional credit models don’t work in Africa. Instead: Use supply chain data, mobile behavior, and transaction flows to build more dynamic credit models. Integrate fintech into cooperative lending structures like tontines or village savings groups, where trust already exists. B2B Payments & Trade Infrastructure – Cross-border trade needs work, killing SME growth. Fix it: Build better escrow and invoice financing tools that help African businesses transact across borders securely. Verticalized Fintech in High-Impact Sectors – Fintech should power real economic activity, not just payments. Agritech fintech: Give farmers access to dynamic pricing, supply chain finance, and better insurance. Healthcare fintech: Enable embedded payments and credit for medical services, helping people afford care without predatory loans. Logistics fintech: Provide financing for truckers, warehousing solutions, and real-time supply chain support. Infrastructure-First Fintech – If power, internet, & ID verification are problems, solve those first. Payments without stable connectivity? Build USSD-based financial services. Weak credit infrastructure? Build platforms that help lenders pool risk and share credit data across borders. The era of cheap fundraising gimmicks is over. African fintech must shift from vanity metrics to real impact, solving income generation, trade inefficiencies, and credit access at scale. I'm tired of saying this, founders who build with these in mind won’t need to beg for funding; investors will come looking for them.

The most striking figure in our new Ripple report isn't an adoption statistic. It's this: of the 31 instant payment systems operating across Africa, only 3 can process cross-border payments in real time. And 171 mobile money operators still run in isolation from one another. To me, that is the real story of 𝐒𝐭𝐚𝐛𝐥𝐞𝐜𝐨𝐢𝐧 𝐒𝐩𝐨𝐭𝐥𝐢𝐠𝐡𝐭 𝐨𝐧 𝐀𝐟𝐫𝐢𝐜𝐚. This is a continent that led the world on consumer fintech: 835 million registered mobile money accounts (nearly half the global total) and 156 mobile money services (half the world's total), sitting on top of underlying rails that were never built for the scale of its ambitions. Africa didn't play catch-up on fintech; it charted its own path. The unfinished work is in the plumbing beneath it. A few things that stand out: 💸 𝐓𝐡𝐞 𝐜𝐨𝐬𝐭 𝐨𝐟 𝐟𝐫𝐢𝐜𝐭𝐢𝐨𝐧 𝐢𝐬 𝐦𝐞𝐚𝐬𝐮𝐫𝐚𝐛𝐥𝐞 Sending $200 to Sub-Saharan Africa costs 8% in fees on average. Intra-African corridors regularly exceed 20%. With an estimated 75% of remittances going directly to households, that isn't an abstraction. It's a structural tax on families. 🏦 𝐃𝐞-𝐫𝐢𝐬𝐤𝐢𝐧𝐠 𝐡𝐚𝐬 𝐥𝐞𝐟𝐭 𝐚 𝐠𝐚𝐩 𝐭𝐡𝐚𝐭 𝐧𝐞𝐞𝐝𝐬 𝐟𝐢𝐥𝐥𝐢𝐧𝐠 Only 12% of intra-African payments are fully processed on the continent. The rest rely on correspondent banking relationships that, as the Financial Action Task Force (FATF)Financial Action Task Force (FATF) has observed, banks are increasingly terminating wholesale rather than managing. 💵 𝐃𝐨𝐥𝐥𝐚𝐫 𝐚𝐜𝐜𝐞𝐬𝐬 𝐢𝐬 𝐚 𝐠𝐫𝐨𝐰𝐭𝐡 𝐪𝐮𝐞𝐬𝐭𝐢𝐨𝐧 With around 56% of global reserves and over half of global invoicing in USD, dollar liquidity is a structural requirement for participating in trade. For the many African economies operating as net importers, USD-denominated stablecoins, working in tandem with well-regulated local currency stablecoins, offer a practical route to it. ⚖️ 𝐓𝐡𝐞 𝐫𝐞𝐠𝐮𝐥𝐚𝐭𝐨𝐫𝐲 𝐬𝐞𝐪𝐮𝐞𝐧𝐜𝐢𝐧𝐠 𝐢𝐬 𝐚 𝐠𝐞𝐧𝐮𝐢𝐧𝐞 𝐚𝐝𝐯𝐚𝐧𝐭𝐚𝐠𝐞 No African market has implemented a stablecoin framework yet, which means provisions can be built directly into first-phase crypto regulation rather than retrofitted later. 🚀 𝐀𝐧𝐝 𝐭𝐡𝐢𝐬 𝐢𝐬 𝐚𝐥𝐥 𝐛𝐞𝐟𝐨𝐫𝐞 𝐭𝐨𝐤𝐞𝐧𝐢𝐬𝐚𝐭𝐢𝐨𝐧 Agricultural commodities, real estate, natural resources, infrastructure - assets that have long struggled for liquidity and investor access. Stablecoins are the settlement layer that makes any of it work. Great work Abdallah Mukalled - this is exactly the kind of evidence-based analysis the policy conversation needs. As the report concludes: regulation and trust are key, and the time to act is now. 📖 𝐑𝐞𝐚𝐝 𝐦𝐨𝐫𝐞 𝐡𝐞𝐫𝐞: https://https://lnkd.in/g8FRYwhm

TymeBank (South Africa) and Moniepoint (Nigeria) have achieved unicorn status with valuations of $1.5 billion and over $1 billion, respectively, by blending digital banking with physical touchpoints. This hybrid model caters to Africa’s 90% cash-based economy and unbanked populations, overcoming barriers like unreliable internet and low trust in online-only systems. Together, these fintechs now serve over 25 million users, redefining what scaling financial inclusion looks like in emerging markets. SO WHAT TymeBank's partnership with supermarkets like Pick n Pay has enabled the deployment of over 1,000 kiosks and 15,000 retail points across South Africa, allowing it to grow to 15 million users. Moniepoint’s 200,000 agents, acting as human ATMs, bridge the gap in Nigeria, where only 16 ATMs per 100,000 adults exist, supporting over 10 million users. Both companies are expanding into Asia and broader African markets, leveraging $360 million in recent funding rounds to replicate their models. A digital-only strategy, like that pursued by Kuda (valued at $500 million), may be more scalable in regions with higher internet penetration and digital trust. However, it risks limiting market reach in areas where 43% or fewer have reliable connectivity. Think about it this way: the hybrid model embraces complexity to unlock growth in underserved regions. Could a hybrid approach redefine banking for other industries or regions, or is this model uniquely suited to Africa’s fintech challenges? What’s your take on scaling such a model sustainably? #fintech

I spent 2024 studying four disruptive African fintechs—Turaco, Pesapal, Kopo Kopo Inc and Chumz.io—and found common patterns in their success. These companies aren’t winning by copying Silicon Valley. They are winning by truly understanding Africa’s unique needs and solving real problems for millions of unbanked and underserved people. Here are the three patterns I found: 1. They deeply understand their customers Rather than forcing Western ideas into the market, they design solutions that fit local realities. Turaco saw that traditional insurance was too expensive for most people. So they created an affordable alternative offering coverage for as little as USD 2 a month, with claims paid in just two business days. That’s a game-changer in a market where insurance payouts takes weeks. 2. They believe in partnerships These fintechs know they can’t do it alone. Collaboration is part of their DNA. Pesapal partnered with Oracle Hospitality to simplify bookings and payments for hotels and restaurants. Chumz.io teamed up with Nabo Capital to allow users to earn interest on their savings. They make financial services more accessible by working with trusted, established names. 3. They solve real African problems These companies are building for the local markets. Kopo Kopo Inc has helped over 20,000 small businesses in Kenya processs digital payments. They recognize that small businesses are the backbone of African economies, yet they are often overlooked by traditional banks. Even their entry points reflect local realities. Chumz.io allows people to start saving with as little as KES 5. Their focus is helping people take their first step toward financial security by starting and keeping a saving habit. Fintech success in Africa comes down to understanding the market and building products that solve real, everyday problems. When you focus on serving people’s actual needs, growth happens naturally. These companies are changing how millions interact with money. And that is the kind of innovation that moves entire economies forward. PS - Follow me Ben David for more finance industry insights.

Fintech on the African continent is not only about financial inclusion and payments. So an assumption that fintechs are competing with traditional banks for the same market may not tell the full story. Fintech has impacted the African continent, affecting the lives of millions of people, businesses, and the broader economy. Without mentioning financial inclusion, here are some ways fintech is making an impact: 1. 𝐌𝐢𝐜𝐫𝐨𝐥𝐨𝐚𝐧𝐬 𝐚𝐧𝐝 𝐌𝐢𝐜𝐫𝐨𝐟𝐢𝐧𝐚𝐧𝐜𝐞: Digital platforms have made it possible to offer small loans to individuals and businesses that are traditionally overlooked by banks. With mobile lending apps and peer-to-peer lending platforms, users can apply for loans and receive decisions within a short period. These enable small businesses to grow and generate income. It has a direct impact on SMEs which are the backbone of many African economies. 2. 𝐅𝐢𝐧𝐚𝐧𝐜𝐢𝐚𝐥 𝐋𝐢𝐭𝐞𝐫𝐚𝐜𝐲: Many fintech apps incorporate features that help users budget, save, and invest. By empowering individuals with financial knowledge, fintech is promoting responsible financial behaviour and contributing to economic stability. 3. 𝐀𝐠𝐫𝐢𝐜𝐮𝐥𝐭𝐮𝐫𝐞: Fintech solutions are modernising Africa's agric sector, which is a major source of employment across the continent. For instance, digital platforms provide smallholder farmers with access to finance, crop insurance, and market information, improving productivity and income stability. 4. 𝐈𝐧𝐧𝐨𝐯𝐚𝐭𝐢𝐨𝐧 𝐢𝐧 𝐒𝐞𝐫𝐯𝐢𝐜𝐞𝐬: Fintech has led to a wave of innovation from pay-as-you-go solar energy to digital-only banks. For example, fintechs like Flutterwave are simplifying processes by providing a unified payment solution that connects Africa to the global economy. 5. 𝐒𝐭𝐢𝐦𝐮𝐥𝐚𝐭𝐢𝐧𝐠 𝐄𝐜𝐨𝐧𝐨𝐦𝐢𝐜 𝐆𝐫𝐨𝐰𝐭𝐡: By facilitating payments, access to credit, and savings, Fintech is playing a role in stimulating economic activity. In addition, fintechs are creating jobs and helping to develop the digital economy, which contributes to GDP growth. 6. 𝐂𝐫𝐨𝐬𝐬-𝐁𝐨𝐫𝐝𝐞𝐫 𝐏𝐚𝐲𝐦𝐞𝐧𝐭𝐬: Fintechs have simplified the process of sending money across borders. This is beneficial for Africa, which has a large diaspora population, and remittances are a vital source of income for many households. By reducing the cost and time taken for such transactions, fintech makes remittances cheaper, quicker, and more efficient than traditional banking systems. 9. 𝐑𝐞𝐠𝐮𝐥𝐚𝐭𝐨𝐫𝐲 𝐂𝐡𝐚𝐧𝐠𝐞𝐬: The rise of fintech has prompted regulatory changes, with governments and central banks developing regulatory frameworks to guide the growth of fintech. This is leading to a more defined and robust financial environment.   There are challenges associated with the rise of fintech in Africa. However, the potential benefits of fintech are enormous, and with appropriate regulation and oversight, it can continue to transform the continent's financial landscape. #fintech #Africarising #investments

The money exists. The data exists. What's missing is the bridge between them. Small businesses are the backbone of Africa’s economy, but many can't get loans. A new wave of fintech startups is trying to fix that, using tech to offer credit where banks won’t. But there’s a problem: these startups often can’t get funding themselves, especially in the early stages. Traditional investors want big profits fast. That makes them avoid riskier startups focused on low-income customers. As a result, more than half of inclusive credit fintechs don’t survive past their first funding round. New types of investors called data-driven asset managers are changing the game. They use real-time data from fintechs to understand risks better and offer smarter, more flexible loans. These include “revenue-based financing” where repayments are tied to how much money a company actually makes. But many investors still don’t know how to use this tech, and fintechs lack support to set it up. If donors, governments, and big investors step in to bridge that knowledge and tech gap, they could unlock a huge wave of funding, helping millions of small businesses thrive. Key Facts: - $4.9 trillion: Global credit gap for small businesses. - 270+ fintechs in Africa raised $4B+ over the past decade. - 54% of inclusive fintechs don’t make it past their first funding round. - Only 15% survive to raise three or more rounds. - Most early-stage deals are under $500K, too small for traditional investors. - Debt is essential to scale loan books, but hard to access early on. What Needs to Happen Next: - Boost awareness of data-driven financing tools among investors. - Support fintechs with tech and training to integrate real-time data systems. - Create flexible loan options, like revenue-based or drawdown-on-demand debt. - Encourage partnerships between innovative asset managers and development banks. - Develop funding models that reward long-term impact, not just quick profits. #Fintechs #Financing #FundRaising #FinancialInclusion #MicroFinance #EconomicInclusion Data Source: Innovative Financing for Inclusive Credit Fintechs in Africa by CGAP

Continental enterprises don't need Silicon Valley permission to reach 100 million users. Vodacom Group just crossed 103 million active fintech customers—17.4% year-on-year growth. Combined with MTN's MoMo, African telcos now process over $1 trillion annually in mobile money transactions. Egypt added 3 million users in twelve months. Tanzania's M-Pesa hit $5 billion in revenue. "Beyond core" products—lending, savings, insurance—now represent 46.4% of M-Pesa revenue, overtaking simple peer-to-peer transfers. Vodacom facilitated $26.7 billion in loans across international markets. The reason is simple: regulatory fragmentation that blocks Western fintechs creates defensible moats for operators who can navigate multi-jurisdictional compliance and build distribution through existing SIM card penetration. For those deploying capital into African fintech: are you backing founders who understand telco partnerships and regulatory arbitrage, or chasing consumer apps that can't distribute? #Fintech #Africa #TelcoStrategy #Nigeria