Africa’s $100 Billion SME Credit Gap Spurs Banks and Fintechs into Strategic Partnerships
Africa faces an estimated $100 billion shortfall in credit for small and medium enterprises (SMEs), prompting banks, fintech startups, and telecom operators to form unexpected alliances to bridge the financing gap. According to the African Development Bank (AfDB), limited access to credit remains one of the continent’s biggest barriers to industrial growth, job creation, and economic diversification.
A recent study, Banking on Innovation by Briter and Lateral Frontiers, highlights a shift in the financial landscape: collaboration is now overtaking disruption as the dominant force in digital finance. Once seen as challengers to traditional banks, fintechs are increasingly co-creating solutions with banks and telcos to tackle long-standing financial constraints, particularly the SME credit deficit.
In Kenya, for example, the $25 billion working-capital shortfall, roughly a quarter of GDP, has forced lenders to abandon siloed approaches. Partnerships like Citi, Visa, and Cellulant’s Citi Optimised Pay platform demonstrate how combining global banking infrastructure, secure payment networks, and regional fintech rails can provide SMEs with near-instant liquidity, reducing delays in invoice payments and supporting cash flow for thousands of small suppliers.
Egypt presents a different dynamic, where the bank-led financial system requires fintechs to work closely with major banks to scale. The collaboration between valU, a buy-now-pay-later platform, and Banque Misr illustrates how fintech agility paired with bank credibility can expand credit access to millions of Egyptians. Regulatory support from the Central Bank of Egypt, through systems like Meeza and InstaPay, has further enabled these partnerships despite limitations in open banking and data infrastructure.
Nigeria offers a hybrid model, where fintechs like Paystack, Flutterwave, and Carbon partner with banks such as FCMB and Ecobank to digitize payments, streamline onboarding, and expand lending corridors. The study concludes that Africa’s financial evolution will increasingly rely on cross-sector partnerships, modernized data frameworks, and regulatory clarity. With tight funding and a persistent credit gap, the continent’s financial future is being shaped by collaborative innovation rather than standalone players.
source: Business day