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 identified SME financing constraints as one of the continent’s most persistent economic obstacles, warning that limited credit access continues to slow job creation, industrial growth, and economic diversification.
This is even as a new study entitled, ‘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.
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For years, African fintechs were celebrated as challengers positioned to unseat slow-moving banks. That narrative has shifted markedly. 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. In the East African nation, 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.
By pairing fintech agility with bank credibility, the partnership helped to transform BNPL from a niche product into a mainstream credit tool in a country where many still rely on cash. Such collaborations have been supported by regulatory moves from the Central Bank of Egypt, which has pushed interoperability through systems like Meeza and InstaPay.
Even so, the report warns that Egypt’s lack of modern data infrastructure and the slow rollout of open banking continue to limit the depth of available credit products, leaving significant unmet demand.
Nigeria’s case
Nigeria presents a hybrid model shaped by payments innovation, a fast-growing digital economy, and regulatory unpredictability. Although it has expanded financial access through digital payments, agent banking, and wallet-based services, its credit market remains fragmented and heavily informal. Fintechs such as Paystack, Flutterwave, Carbon, Kuda, and Moniepoint have introduced new forms of digital lending and merchant credit, yet regulatory volatility has complicated their ability to scale lending products.
Still, cooperation between banks and fintechs has strengthened. Paystack’s partnership-driven model, which plugged directly into banks’ settlement systems, enabled more than 60,000 businesses to digitise their transactions before its acquisition by Stripe.
Banks such as FCMB and Ecobank have embraced fintechs to streamline onboarding, expand retail reach, and open new lending corridors.
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Joint innovation, the report notes, has become a practical necessity in a market where regulatory changes, from digital-lending crackdowns to fluctuating crypto rules, can quickly undermine standalone fintech models.
Next phase
The report suggests that the next stage of Africa’s financial evolution will depend on more robust digital public infrastructure, cross-border payment integration, modernised data frameworks, and regulatory clarity.
It also notes that artificial intelligence and open banking could accelerate credit access if governments and financial institutions embrace interoperability and transparent data-sharing.
Despite the challenges, the authors argue that Africa is no longer simply adapting global financial models; it is constructing new ones shaped by necessity, demographic dynamics, and the continent’s unique blend of fintech ingenuity and institutional resilience.
The study concluded that as long as the credit gap remains wide and funding conditions stay tight, Africa’s financial future will be built not by standalone players but by partnerships that cut across sectors, jurisdictions, and legacy boundaries.
