Africa’s chronic $100 billion financing gap for small and medium enterprises is accelerating a wave of cross-sector alliances that would have seemed improbable a decade ago.
Banks, telecom operators, and fintech startups which were once positioned as rivals are currently tying their futures together as they confront one of the continent’s most stubborn structural barriers: access to credit.
The estimate, drawn from a comprehensive African Development Bank (AfDB) assessment, highlights how far short the continent sits from meeting SME credit demand. The AfDB warns that the deficit is stifling job creation, capping industrial output, and slowing diversification efforts, creating pressure for deeper cooperation across financial ecosystems.
ALSO: S&P Global Ratings Officially Dismisses Claims of Bias in African Sovereign Ratings
That urgency is reflected in a new report, “Banking on Innovation” by Briter Bridges and Lateral Frontiers, which studied financial ecosystems in Egypt, Kenya, and Nigeria. Its conclusion is unambiguous: Africa’s digital-finance landscape has shifted from a “disrupt the banks” era to one where collaboration is the primary catalyst for innovation.
From Disruption to Dependence
For years, fintechs were celebrated as insurgents ready to displace incumbent banks. But as venture capital tightened, regulators stepped up scrutiny, and consumers demanded reliability over novelty, disruptive narratives lost their shine. Today, fintechs increasingly need banks for distribution and regulatory cover, while banks depend on fintechs for speed, data, and product innovation.
This collaborative pivot is clearest in efforts to close the SME credit gap, a challenge too large, and too operationally complex, for any single stakeholder to address.
Kenya: Supply-Chain Innovation Takes Center Stage
Kenya offers perhaps the most vivid case study. With a working-capital deficit of roughly $25 billion, or about a quarter of the country’s GDP, lenders have been forced to rethink siloed operating models.
One of the report’s standout examples is the three-way partnership between Citi, Visa, and Cellulant, which created Citi Optimised Pay, a digital supply-chain financing platform that allows corporate buyers to pay suppliers almost instantly via commercial cards integrated into Cellulant’s rails.
For SMEs that routinely wait 60–120 days for invoice settlement, the tool releases essential cash flow directly into bank accounts or mobile wallets. By pairing Citi’s global banking network with Visa’s security infrastructure and Cellulant’s regional reach, the model has become a benchmark for tackling liquidity bottlenecks previously considered too entrenched to solve.
Egypt: Bank-Led Infrastructure Meets Fintech Velocity
Egypt’s credit deficit is shaped by its heavily bank-dominated system, where fintechs require deep integration with major institutions to scale. The partnership between valU, the BNPL platform backed by EFG Hermes, and Banque Misr shows how this can work effectively.
Banque Misr’s investment enabled valU to dramatically expand its consumer-credit footprint, making installment financing a mainstream option in a market where formal credit penetration remains low. Regulatory pushes from the Central Bank of Egypt — including interoperability tools like Meeza and InstaPay — have further nudged banks and fintechs toward cooperation, though the report warns that slow progress on open banking and weak data infrastructure continue to constrain product depth.
Nigeria: Innovation Thrives, but Regulation Sets the Pace
Nigeria, Africa’s largest fintech hub, represents a hybrid model influenced by rapid digital-payments growth and regulatory unpredictability. While fintechs like Paystack, Flutterwave, Carbon, Kuda, Fairmoney, and Moniepoint have built innovative lending and merchant-credit rails, their scaling efforts often run into compliance headwinds.
Nevertheless, cooperation has strengthened. Paystack’s bank-integrated approach which plugged directly into settlement systems enabled more than 60,000 merchants to digitize operations before its acquisition by Stripe. Banks such as FCMB and Ecobank have embraced API-based collaboration to widen retail reach and streamline credit workflows.
Given frequent regulatory swings from digital-lending crackdowns to crypto policy whiplash the report argues that partnerships are now essential risk-management tools for fintechs seeking stability.
Investor Sentiment: From Apps to Infrastructure
Across all three countries, the study notes a marked shift in investor appetite. The hyper-growth phase of 2020–2021, when African fintechs attracted more than $3 billion annually, has cooled. Instead of standalone consumer apps, investors are channelling capital into infrastructure-heavy ventures spanning credit scoring, digital identity, enterprise finance, and embedded banking.
This reorientation has made partnerships even more valuable. Banks and telcos offer data and distribution at scale, while fintechs deliver agility, automation, and alternative credit methodologies.
A New Financial Architecture Emerges
The study describes an evolving financial ecosystem no longer defined by clear boundaries. Telcos, once viewed as looming threats now operate as essential rails and identity platforms, especially in Kenya where M-Pesa remains indispensable for mass-market reach.
Banks, formerly defensive incumbents, are opening APIs, investing in startups, and redesigning product suites around digital-first users. Fintechs have effectively become the connective tissue holding the system together, facilitating payments, accelerating underwriting, and enabling credit delivery to underserved populations.
The report argues that the next phase of Africa’s financial transformation will hinge on:
-
Modern digital public infrastructure
-
Cross-border payment harmonization
-
Stronger data frameworks and open banking
-
Responsible AI adoption in credit scoring and risk modeling
Collaboration Is No Longer Optional
Africa is no longer adapting global fintech models, it is creating new ones shaped by necessity, demographics, and an ecosystem that thrives on interdependence. With the SME credit gap still towering over the continent and funding conditions tightening, the future of African finance will be defined not by solitary disruptors but by partnerships that bridge sectors, regions, and legacy systems.
Comments 4