Africa’s fintech sector is often caught between hype and harsh reality. It’s a space bursting with potential but also riddled with misconceptions, especially for international investors and observers looking in from afar, writes Wilson Ningamai Nyah, CEO of Nyanu Investment Services, an investment consultancy bridging US capital with Africa’s fintech and creative economies.
Let’s unpack five of the most common myths about fintech in Africa and set the record straight using real data.
Myth 1: “Africa is going cashless.”
Reality: Not anytime soon.
Despite mobile money platforms like M-Pesa and increasing smartphone usage, cash is still king across much of sub-Saharan Africa.
“Sub-Saharan Africa remains predominantly cash-based, with about 90% of payments and transactions conducted in cash.”
— Finance in Africa, European Investment Bank (2022)
This cash dominance highlights the uphill battle for digital finance providers to achieve widespread adoption. The truth is: without deep trust, infrastructure, and cultural integration, fintech can’t replace cash, it must first coexist with it.
Myth 2: “Most Africans have access to digital financial services.”
Reality: Phones don’t equal finance.
It’s true, Africa has one of the fastest-growing mobile user bases in the world. But here’s the kicker: owning a mobile device doesn’t mean you’re plugged into the financial system. A vast number of phones are still used strictly for calls, messaging, and social media, not mobile banking or investing.
“Only 43% of Africans had any kind of financial account, including mobile money as of 2020, leaving over 360 million adults without access to any formal financial system.”
— Digital Banking in Sub-Saharan Africa, BPC
The infrastructure may be there, but uptake isn’t. Why? Barriers like digital illiteracy, lack of trust, inconsistent ID systems, and steep onboarding processes keep millions in the margins.
Myth 3: “The continent is ready for mass fintech adoption.”
Reality: The map matters.
Africa is a continent of 54 nations, and when it comes to fintech readiness, the differences are night and day. Kenya is lightyears ahead thanks to M-Pesa and a strong agent network. But in many countries like Ethiopia, Nigeria, or the DRC, things are still very analog for large swaths of the population.
“Banking penetration in these markets ranges between just 25% and 40%, meaning most adults still operate outside formal finance.”
— Digital and Web3 Lending in Africa, EMURGO Africa (2023)
You can’t copy-paste a solution across borders. What works in Nairobi won’t necessarily fly in Lagos. Each market has its own rules, regulators, cultures, and consumer habits. Mass adoption can only be achieved with local adaptation.
Myth 4: “Fintech isn’t working in Africa.”
Reality: It is—especially in underserved niches.
African fintech is thriving where it solves real, local problems. Mobile lending, remittances, virtual savings, and short-term credit are booming across Kenya, Tanzania, Rwanda, and Uganda.
For example, products like M-Shwari (Kenya), M-Pawa (Tanzania), and Mokash (Uganda & Rwanda) have opened over 20 million virtual savings accounts in just five years, compared to 30 million accounts in the entire formal banking sector.
And while SME lending remains difficult through traditional banks, fintech platforms are stepping in:
“More than 80% of formal SMEs in sub-Saharan Africa have unmet financing needs.”
— Finance in Africa, European Investment Bank (2022)
Fintech’s real strength lies in filling these painful gaps.
Myth 5: “It’s too early to invest in African fintech.”
Reality: The window of opportunity is now, especially for long-term investors.
Web3 lending platforms, for example, are offering credit to SMEs at interest rates as low as 2–6% annually, bypassing traditional bank requirements like collateral and credit history.
These platforms, powered by blockchain, can offer lower risk of default through automation and smart contracts. In fact:
“Cumulative bad debt across global Web3 lending platforms in 2021 was just $1 million out of $200 billion in loans, an insignificant 0.000005%.”
— Digital and Web3 Lending in Africa, EMURGO Africa (2023)
That kind of default rate is unheard of in traditional African lending environments and a glimpse into how innovative solutions can rewrite the rules.
Final thoughts
Fintech in Africa is a story still being written, not one already concluded. It’s a region full of contradictions: high potential, low penetration; strong mobile networks, weak financial infrastructure. But therein lies the opportunity.
Investors and founders who embrace local context, solve real-world problems, and stay long enough to build trust, will find that African fintech isn’t just viable, it’s vital.
