Africa’s $100bn credit gap pushes banks, fintechs into unlikely partnerships

Africa’s estimated $100 billion credit shortfall for small and medium enterprises is forcing banks, telecom operators, and fintech startups into deeper and unexpected partnerships.

The Africa-wide figure comes from a detailed assessment by the African Development Bank (AfDB), which identifies SME financing constraints as one of the continent’s most persistent economic obstacles and warns that limited credit access continues to slow job creation, industrial growth, and economic diversification. The AfDB’s estimate captures the magnitude of unmet credit demand and underscores why collaboration has become essential across financial sectors.

This is even as a new study titled “Banking on Innovation by Briter and Lateral Frontiers,” which examines financial ecosystems in Egypt, Kenya, and Nigeria, says the region has entered a phase where collaboration has overtaken disruption as the dominant driver of digital finance.

For years, African fintechs were celebrated as challengers, positioned to unseat slow-moving banks. That narrative has shifted markedly as venture funding has cooled, regulators have tightened rules, and consumers increasingly want integrated and reliable services.

The report by Briter and Lateral Frontiers argues that these pressures have pushed banks, telcos, and fintechs to co-create products that address long-standing financial fractures, none more urgent than the continent’s vast SME financing deficit.

For instance, Kenya offers one of the clearest illustrations of this new dynamic. There, a persistent working-capital shortfall valued at about $25 billion, roughly a quarter of the country’s GDP, has forced lenders to abandon siloed models in favour of deeper cross-sector collaboration.

The report highlights Citi’s partnership with Visa and Cellulant, which created a digital supply-chain finance tool known as Citi Optimised Pay. The platform allows large corporate buyers to pay suppliers almost instantly using commercial cards lodged on Cellulant’s payment infrastructure, bypassing the long delays that typically plague SME payments.

For thousands of small suppliers who routinely wait months for invoices to clear, the service provides critical liquidity through direct disbursements to bank accounts or mobile wallets. By combining Citi’s global banking system, Visa’s security architecture, and Cellulant’s regional payment rails, the partnership has become a widely watched template for solving SME cashflow constraints that neither banks nor fintechs could fix alone.

In Egypt, the credit gap takes a different shape. The country’s financial system is heavily bank-led and historically state-controlled, which means fintechs must operate through major banks to achieve scale. This has not prevented innovation. The report points to the partnership between valU, the buy-now-pay-later platform backed by EFG Hermes, and Banque Misr, one of Egypt’s largest banks. Banque Misr’s investment helped valU accelerate its consumer-credit offering, bringing flexible financing options to millions of Egyptians who traditionally lacked access to formal credit channels.

Source: Businessday