Digital Credit Access in African Financial Services

⛽Financial Inclusion Fueling Women's Economic Empowerment in Mozambique 🏦 Having access to a savings account, a credit line, or digital financial services is a reality mostly out of reach for millions of women in the global south. @TechnoServe's approach? Build strategic partnerships with local financial institutions - like M-Pesa and AfricaWorks - to bridge this gap. By conducting market research, offering tailored training, and support for designing gender-focused financial products, our Women in Business program in Mozambique created mutual benefits for women and the financial sector alike. 📣 Hear directly from Isabel, a local shop owner who, as a result of WIN’s work with AfricaWorks, accessed a credit line, adopted mobile money and electronic banking, and immediately benefited from being integrated into the financial system by diversifying and growing her business. What’s the impact of investing in financial inclusion for women? Numbers from WIN make the case: ⭐ M-Pesa, a mobile financial service provider, experienced a remarkable increase in its user base in Mozambique, growing from 10,000 to 110,000, 46% of whom are women. ⭐ An impressive 71% of women participating in M-Pesa’s digital financial savings solution “Xitique” saved more, thanks to a platform redesign that incorporated gender considerations. This redesign, inspired by @TechnoServe's recommendations, was undertaken by the partner financial institution. ⭐ 56% of these women reinvested their savings back into their businesses, and 79% of the women who reinvested in their businesses experienced a growth in income. ⭐ Finally, with improved access to and use of financial services, 4,136 customers (62% women) across WIN’s partnerships with financial service providers indicated that they had more time to spend in their businesses, with their families, or doing other activities. Investing in the financial inclusion of women is not only about progress; it's about mobilizing a systemic transformation that embraces women as customers, entrepreneurs, providers, and ultimately agents of change. #InvestInWomen #TechnoServe #IWD #InspireInclusion #IWD24

In many parts of Africa, millions of micro-businesses and individuals remain financially excluded—not because they lack ambition, but because traditional financial systems aren’t built for them. One of the fintechs I am banking on to be part of the solution to that problem is Regxta. Led by Rukayat Kolawole-Bello, I became fully aware of the ambitions of the business when I heard Rukayat pitch at an event in Lagos, Nigeria. And it was a compelling narrative. Regxta is a digital platform tackling the problem of financial exclusion head-on by providing instant underwriting and loan disbursement to the unbanked. With a simple agent-driven model, Regxta enables small business owners to open accounts, access microloans, and build financial records. All within 24 hours or less. Those outlined steps are often taken for granted but remain out of reach for many. During a recent deep dive into the company—speaking with the founders, visiting their operations, and testing their product—it became clear to me that Regxta is more than just a fintech startup. It is a bridge to economic empowerment for people who are otherwise overlooked by traditional banks. In my view, these are a few things that make Regxta unique: 𝐀𝐈-𝐃𝐫𝐢𝐯𝐞𝐧 𝐂𝐫𝐞𝐝𝐢𝐭 𝐀𝐬𝐬𝐞𝐬𝐬𝐦𝐞𝐧𝐭𝐬: By leveraging alternative data sources—including mobile money transactions, repayment behaviour, and local trust networks—Regxta has achieved an impressively low default rate far lower than many traditional microfinance institutions. 𝐀𝐠𝐞𝐧𝐭-𝐋𝐞𝐝 𝐃𝐢𝐬𝐭𝐫𝐢𝐛𝐮𝐭𝐢𝐨𝐧: Regxta’s network of agents ensures that even in the most remote areas, people can access financial services with minimal friction. 𝐒𝐜𝐚𝐥𝐚𝐛𝐥𝐞 𝐈𝐦𝐩𝐚𝐜𝐭: In just the past 18 months, Regxta has provided over $3.5 million in microloans to 50,000+ small businesses, many of which previously had no access to formal credit. 𝐅𝐚𝐬𝐭 𝐋𝐨𝐚𝐧 𝐃𝐢𝐬𝐛𝐮𝐫𝐬𝐞𝐦𝐞𝐧𝐭: Unlike traditional microfinance institutions that take days or weeks, Regxta disburses approved loans in under 5 minutes. With a strong founding team, a scalable approach, and a mission deeply rooted in financial inclusion, Regxta is not just filling a gap—it is reshaping the financial landscape for Africa’s last-mile customers. That’s why I’m banking on Regxta—𝘯𝘰𝘵 𝘫𝘶𝘴𝘵 𝘢𝘴 𝘢 𝘧𝘪𝘯𝘵𝘦𝘤𝘩, but as the future of banking for those who have been left out for too long.

I’ve sat with farmers who have tilled the same small plots for decades in the most remote rural areas of Uganda. Their neighbors know them as dependable, providers, and stewards of the land. But to a bank, they don’t exist. They lack a formal title deed or a recognized credit record, so their trustworthiness isn’t visible to the financial system. This creates difficulties for these people. If they borrow money, it’s often at interest rates five to ten times higher than those available to formally recognized borrowers. As a result, they are left vulnerable to predatory lenders who take advantage of their situation. Many simply remain unable to access productive credit. In recent years, we’ve been working on a solution to change this reality by transforming the trust already present in communities into something tangible that lenders can recognize and depend on. We achieve this by capturing and verifying local knowledge. Local knowledge includes: 1️⃣ who farms which land 2️⃣ who repays their debts 3️⃣ who keeps shared agreements We then make these ready signals digitally visible to financial institutions. The shift is simple but profound. Where invisible trust becomes recognized collateral. With that, borrowing costs drop and doors to affordable credit open. I’ve seen how this changes lives. When smallholders can access fair credit, they don’t just increase yields—they’re able to invest in soil, in trees, in the resilience of their land and families. When trust becomes visible, finance can finally flow where it’s most needed—right to the people closest to the land. That’s how we unlock not just fair credit for a few farmers, but a more equitable system for millions who have been left out of the financial future.   #FinancialInclusion #RuralEconomies #TrustAsCollateral

For a decade, the African digital credit model was simple. - Banks brought capital. - Telcos brought the customer. - Fintechs brought the intelligence to make it work in real time. That model is breaking down. MTN told investors in June it plans to lend directly, not just enable others to. Axian bought five banking licenses across five countries in one move. Ghana and Rwanda now let fintechs raise their own capital and lend without a bank in the middle. MTN believes only 4 to 5 percent of adults across Africa have access to formal credit and that the revenue pool around that gap could grow tenfold in five years. The middle of the old model, where infrastructure companies have lived for a decade, is getting smaller from both sides. I wrote about what happens next and why I think the winners won't be the ones racing to own the customer. Full article below.

Nigerians Will Now Have Credit Scores Starting August 2025, Nigeria will become the first country in Africa to implement open banking which is a significant development for both consumers and businesses. ✅ But what is open banking? Open banking allows banks and financial institutions to securely share your financial data with licensed fintech companies, but only with your permission, using technology called APIs (Application Programming Interfaces). This gives you more control over your financial data and opens access to better financial products. ✅ Why Should Nigerians Care? For the first time, many Nigerians will have a real credit score, based not on job titles or bank balances, but on how they manage money. This is important because it means: 1️⃣ Access to credit: More people will qualify for loans and credit based on their financial behavior. 2️⃣ Better financial products: Banks and fintechs can offer savings tools, flexible payment options, and credit limits tailored to your needs. 3️⃣ Improved financial inclusion: People without strong banking histories (like digital wallet users) can now be part of the credit system. What Does This Mean for Fintech Founders? 1️⃣ Personalized services: Real-time financial data will allow fintech companies to create more personalized, data driven products. 2️⃣ Smarter credit decisions: With better risk assessments, fintechs can offer loans with confidence. 3️⃣ Reaching underserved markets: Fintechs can now cater to underserved groups, including young people and small business owners, who are often overlooked by traditional banks. ✅ Why This Matters Open banking is more than just a technological shift, it’s a step toward a more inclusive, digital financial system in Nigeria. If used wisely, it could unlock opportunities for millions of Nigerians who’ve previously been excluded from financial systems. If credit scores become a reality in Nigeria, how do you think it will change the way people borrow, spend, and save? Let’s talk in the comments!

Across South Africa, AI is reshaping how financial institutions assess risk, approve credit, detect fraud, and make decisions. According to the joint FSCA and Prudential Authority report, 52% of banks and 50% of payment providers are already using AI, making financial services one of the country’s fastest AI adopters. The opportunity is enormous. AI has the potential to help us serve people who have historically been excluded from the formal financial system, especially informal traders, township entrepreneurs, first-time borrowers, and young people with limited credit histories. More than 16 million South Africans remain outside the formal credit system, while over 1.4 million credit-invisible consumers enter the credit market every year. That is precisely where technology can become a bridge - but it can also become a barrier. If AI models are trained on historical patterns of exclusion, they can reproduce those same inequalities at scale. An algorithm can decline a person without anyone asking a deeper question: Does this person lack creditworthiness, or do they simply lack a traditional financial footprint? Those are not the same thing. Financial inclusion goes beyond just giving everyone access to a bank account. It's when people can access fair opportunities to participate, build, borrow, grow, and recover. This places a responsibility on all of us in fintech to build fairer systems that understand informal economies, recognise alternative signals of trust and reliability, and expand opportunity rather than narrowing it. At Lesaka Technologies Inc., we see every day how much economic activity exists beyond traditional financial datasets. The spaza shop owner. The township merchant. The social grant beneficiary. The entrepreneur who operates almost entirely in cash. These are not invisible people. They are operating in parts of the economy that many systems still struggle to understand. AI in finance should be about strengthening our ability to recognise human potential more fairly. Tech is at its best when it widens the circle - not when it decides who gets left outside it.

Kenya has earned its reputation as the Silicon Savannah, with a fast-evolving fintech ecosystem powering mobile money, digital lending, cross-border payments, and investment platforms. But before you hit “launch,” here’s what it really takes to set up a fintech company in Kenya today: Step 1: Incorporate Your Company Start by registering your business under the Companies Act through Citizen. You’ll need: •A reserved company name •Certificate of Incorporation •KRA PIN, NHIF, NSSF, VAT •Business permit and registered office Step 2: Know Your Niche and Your Regulator Fintech isn’t one-size-fits-all. Your licensing process depends entirely on what you’re building: •Digital lending? You’ll need a Digital Credit Provider (DCP) license from the Central Bank of Kenya (CBK). •Mobile money or e-wallet platform? That falls under the National Payment Systems (NPS) Act, also regulated by CBK. •Investment or crowdfunding platform? You’ll engage with the Capital Markets Authority (CMA) and may need to start in their sandbox. •Insurtech? Your license comes from the Insurance Regulatory Authority (IRA). •Crypto or virtual assets? Keep an eye on the VASP Bill 2025, which will soon introduce formal licensing. •Handling customer data? You must register with the Office of the Data Protection Commissioner (ODPC) and meet all privacy obligations. Your first task is to define what you're offering and get familiar with the relevant regulator. Step 3: Apply for the Right License If you're offering digital credit, you must be licensed by the CBK. Key requirements include: 1. Minimum capital (~KES 5M+ and rising) 2. Fit-and-proper directors with clean records and experience 3. Business plan and governance structure 4. Strong AML/KYC policies 5. Transparent pricing and consumer protection model 6. Compliance with data protection laws PS. CBK’s rules have evolved. As of 2025, they’re pushing for tougher checks on data sharing, interest caps, and enhanced due diligence for all DCPs. Step 4: Get Data & Cybersecurity Right You’ll need to: •Register with the ODPC •Set up data processing consent and breach protocols •Appoint a Data Protection Officer (if your operations require it) •Establish cybersecurity policies under the Computer Misuse and Cybercrimes Act (2018) Step 5: Build Tech + Compliance From Day One Don’t wait until launch. You’ll need to: •Integrate KYC/AML tools •Connect to licensed CRBs •Deploy secure backend systems •Implement automated sanctions screening •Keep detailed logs for audits Kenya’s fintech evolution is rooted in trust. Trust built on strong regulation, transparency, and forward-thinking policies. If you're building in fintech, I’m here to help you structure legally sound, investment-ready ventures across Africa and the GCC. Send me a DM. #Fintech #Kenya #DigitalLending #StartupLaw #CBK #ODPC #AfricaTech #Entrepreneurship #FinancialInclusion #LegalStrategy #RegulatoryCompliance

𝗖𝗕𝗞’𝘀 𝗕𝗶𝗴 𝗕𝗮𝗻𝗴 𝗳𝗼𝗿 𝗙𝗶𝗻𝘁𝗲𝗰𝗵 ⚖️🚀: 𝗪𝗵𝘆 𝗞𝗲𝗻𝘆𝗮’𝘀 𝗡𝗲𝘄 𝗥𝘂𝗹𝗲𝘀 𝗪𝗶𝗹𝗹 𝗥𝗲𝗱𝗿𝗮𝘄 𝘁𝗵𝗲 𝗗𝗶𝗴𝗶𝘁𝗮𝗹 𝗙𝗶𝗻𝗮𝗻𝗰𝗲 𝗠𝗮𝗽 The Central Bank of Kenya’s move to rewrite Kenya’s banking laws is not a side-show for fintech. It is the main event – and the ecosystem needs to be at the table, not in the comments. ⚠️ CBK has issued a tender to review the CBK Act and Banking Act, explicitly to strengthen provisions on digital banking, fintech regulation, consumer protection, and cybersecurity. Today, CBK supervises banks, microfinance banks, PSPs, and digital lenders. Outside that perimeter sits a growing universe of payment aggregators, embedded finance platforms, remittance apps, payroll intermediaries, and crypto firms that move value every day but are not yet clearly framed in statute. That “𝗴𝗿𝗲𝘆 𝘇𝗼𝗻𝗲” has had consequences. In 2022, CBK’s new digital credit rules forced unlicensed lenders to either obtain a licence or effectively lose access to banking and mobile money rails, while ARA, backed by FRC intelligence, froze billions of shillings in fintech‑linked accounts on alleged money‑laundering grounds. The law is now catching up with what enforcement has been signalling for years: if you behave like core financial market infrastructure, you will not stay outside the perimeter for long. 🧭 𝗠𝘆 𝗼𝘄𝗻 𝘃𝗶𝗲𝘄 𝗶𝘀 𝘀𝘁𝗿𝗮𝗶𝗴𝗵𝘁𝗳𝗼𝗿𝘄𝗮𝗿𝗱. Kenya does need clearer, activity‑based rules for anyone who moves money, holds value, or extends credit at scale. A predictable licensing and oversight regime will unlock capital, reduce de‑risking by partners, and give consumers better recourse when things go wrong. But if we copy‑paste a regime designed only for large, deposit‑taking institutions, we will end up protecting the system by hollowing out the very ecosystem that made it global‑class in the first place. 🏦⚔️🚀 𝗧𝗵𝗶𝘀 𝗶𝘀 𝘄𝗵𝗲𝗿𝗲 𝗶𝗻𝗱𝘂𝘀𝘁𝗿𝘆 𝗹𝗲𝗮𝗱𝗲𝗿𝘀𝗵𝗶𝗽 𝗺𝗮𝘁𝘁𝗲𝗿𝘀. The consultation window is the moment to bring real data – on transaction volumes, risk profiles, customer behaviour, and failure modes – into the discussion. Second, we need to push for proportional, risk‑based, activity‑based regulation rather than institution‑based rules. The question should not be “Are you a bank or not?” but “What risks do you create, at what scale, and how do we mitigate them without killing innovation?” Third, this is the time to connect the dots with the Open Finance work already underway in Kenya. The thinking on data sharing, API standards, and consumer outcomes is highly relevant to how the perimeter gets redrawn; it should not sit in a separate policy silo. 🔗 CBK is not asking whether to regulate fintechs; it is asking how. That “how” will shape product design, capital flows, and consumer experiences for the next decade. If you are building in this ecosystem, this is your homework too. 📌 #Kenya #FinTech #Regulation #CBK #DigitalCredit #OpenFinance #DigitalInfrastructure

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

I had the opportunity to speak on News Central TV about Nigeria’s fast-growing Buy Now, Pay Later (BNPL) market, a market projected to hit $1.62 billion this year. At VeendHQ (Techstars '23), we’ve seen firsthand how #BNPL can drive financial inclusion, increase merchant sales, and improve access to credit for consumers who otherwise have limited options. However, we must also be clear-eyed about the risks: defaults, regulatory gaps, and over-indebtedness can quickly erode trust and sustainability if not managed carefully. We built Vida, our AI-powered decision engine, to help #lenders and #merchants assess creditworthiness responsibly and offer BNPL in a fast, safe, and inclusive way. With tools like income verification, credit profiling, and repayment automation, we're enabling a new era of responsible digital credit in Africa. I believe BNPL can be a game-changer in Nigeria and across Africa, but only if we prioritize consumer protection, education, and transparency. #digitalcredit #Fintech #FinancialInclusion #Nigeria #CreditInnovation #AI #Veend #Vida #Ecommerce Perpetua Fasanmi-Peter Lekan Onabanjo Resilience17 First Circle Capital