Africa’s FinTech landscape is characterized by its reliance on mobile technology, digital platforms, and adaptive cultural practices. The sector experiences remarkable growth and profitability, supported by strong market demand and frequent political backing. With over half of the world’s mobile money accounts located on the continent, FinTech serves as a vital tool for financial access, especially in regions and localities underserved by traditional banking.
Services such as M-Pesa in Kenya and EcoCash in Zimbabwe show that mobile platforms integrate into informal economies, enabling payments and loans for millions of users. However, these platforms also expose users to risks, including privacy violations, fraud, and exploitative practices. The interest rates and payback conditions of loans sold via FinTech can impose a heavy cost burden and mental stress.
The rapid growth of FinTech in Africa is deeply embedded in local as well as global histories and political economies. For example, historical patterns of colonial exploitation, coupled with contemporary modes of economization, influence the development and adoption of financial technologies (Langley and Rodima-Taylor 2022). Mobile money platforms, digital lending apps, and open banking initiatives are part of a broader political economy shaped by technology and finance alliances.
The financial technology (FinTech) sector in Africa has been a key topic of debate among scholars, policymakers, industry stakeholders, and the public. Discussions highlight its potential to address developmental challenges, while also raising concerns about debt collection practices, the need for regulation, and its inherent contradictions and social harm. Two dominant discourses frame the narrative around African FinTech (LeGrand, Paterson & Wiegratz 2023). The first positions FinTech as an exemplar of neo-colonial, racialized platform capitalism, raising concerns about debt crises, data piracy, bottom-up wealth transfer, and exacerbation of inequalities.
The second, often promoted by businesses and governments, celebrates FinTech as a transformative force capable of driving inclusive growth and addressing structural limitations in financial access. These competing views, along with the sector’s complex nature, broad impacts, and central role in daily economic life and political economy on the continent, highlight the need for a deeper and more nuanced understanding of the actors, interests, power dynamics, and socio-political factors shaping Africa’s FinTech landscape.
Against this background, our research has examined a key aspect of the larger theme: the making of FinTech in Africa. More specifically, it has focused on the socio-political and economic underpinning of the emergence of FinTech, and explored (i) the actors and narratives driving the sector, (ii) the optimistic portrayal of FinTech in African media, and (iii) the scholarly critiques revealing its systemic flaws. It also addresses the implications of open finance, data protection, and the evolving role of social media and savings groups in shaping Africa’s financial landscape.
In this blog, we examine some of these differential perspectives on the political economy, role and impact of FinTech in African societies and suggest frameworks for understanding these dynamics, outlining fresh pathways for both scholarly inquiry and policy innovation.
The Meaning-Making of FinTech in Africa
African news media predominantly portrays FinTech as a panacea for the continent’s developmental challenges, aligning with a broader discourse of “Afro-optimism” (LeGrand, Paterson & Wiegratz 2023). This celebratory narrative emphasizes technological innovation, financial inclusion, and economic empowerment, often overshadowing critical analyses of the sector’s shortcomings—such as predatory lending, fraud, data piracy, and systemic inequalities.
Based on an analysis of 386 articles published between 2016 and 2021 from various African news, the study finds that in the majority of articles—often originating from business and governmental sectors—FinTech is depicted as a positive force for financial inclusion, as challenging traditional banking structures, and as empowering national development. Critical voices about the negative social and economic impacts of FinTech are largely absent.
There is also a limited representation of gender inclusivity in the FinTech narrative, despite frequent claims that FinTech can empower women. Only 2% of the sampled articles explicitly discussed the benefits of FinTech for women, revealing a gap between the discourse of financial inclusion and its actual representation in the media (LeGrand, Paterson & Wiegratz 2024).
Scholarly Critiques of Challenges and Flaws
In a marked difference from many news media reports, scholarly critiques emphasize persistent challenges and systemic vulnerabilities of FinTech in Africa. Recent case studies from Nigeria, Ghana, Zimbabwe, and Uganda reveal widespread issues around FinTech platforms related to fraud and exploitative practice, inadequate consumer protection, and regulatory gaps.
In Nigeria, mobile money fraud presents critical risks for both customers and agents. Mobile money agents, while essential for financial access among members of low-income groups in African economies, often lack adequate training and access to secure infrastructure. This leaves them susceptible to malware attacks and unauthorized data sharing (Mogaji & Nguyen 2022). Mobile money agents may also charge high fees or disclose sensitive customer information to third parties. Reportedly, many customers have minimal digital literacy, making them vulnerable to fraud. Regulatory fragmentation between the Central Bank of Nigeria (CBN) and the Nigerian Communications Commission (NCC), for example, creates gaps that enable identity theft and unauthorized transactions, undermining public trust.
The rise of digital lending apps in Nigeria has compounded financial challenges for low-income populations, which include exorbitant interest rates and coercive repayment tactics. These platforms often require invasive access to users’ personal data, which is then leveraged for “algorithmic extortion” (Jalal-Eddeen 2024). Borrowers’ social networks are used to enforce repayments, perpetuating cycles of debt and social exclusion. Such practices underline the need for ethical data governance frameworks in digital financial services.
In Ghana, similar challenges prevail. Mobile money, introduced in 2009, has grown rapidly but suffers from weak infrastructure and regulatory oversight. Outdated systems and insufficient training of agents make the system vulnerable to fraud (Akomea-Frimpong et al. 2019). There is a lack of robust fraud prevention protocols, suggesting issues in the collaboration among regulatory authorities, mobile operators, and financial institutions.
Zimbabwe’s mobile money sector further illustrates the connection between financial exploitation and economic instability. While platforms like EcoCash provide vital services in a cash-strapped economy, they are also entangled in speculative activities that destabilize the broader financial system. Users face exorbitant transaction fees, with agents charging up to 60% on cash withdrawals (Tsokota et al. 2023). Fraud schemes exploit limited digital literacy and weak consumer protection laws. The regulatory divide between the Reserve Bank and the Postal and Telecommunications Regulatory Authority contributes to these issues.
Uganda presents a different yet equally concerning picture. Mobile money fraud frequently targets micro, small, and medium enterprises (MSMEs), especially in marginalized rural districts like Gulu. Unauthorized fees, phishing schemes, and misinformation are prevalent (Bongomin & Ntayi 2020). The lack of comprehensive digital consumer protection frameworks leaves users vulnerable. To reduce these risks, educational campaigns on digital security and regulatory reforms promoting stakeholder collaboration are needed.
Across all these cases, systemic and socially harmful gaps in regulatory structures and technological infrastructure emerge as common themes. Regulatory fragmentation, insufficient training, and outdated systems create environments where fraud can thrive, causing financial loss for individual users and their families, as well as and collectives, such as informal savings groups.
The exploitative practices of some FinTech platforms—such as high fees, privacy violations, and coercive debt collection—underscore urgent ethical, societal, and political concerns, particularly regarding the political economy that enables these outcomes to become institutionalized and routinized. These critiques underscore the need for stronger regulatory frameworks, enhanced consumer protection, and greater oversight of technology firms operating in Africa’s FinTech space.
The Issues of Open Finance and Data Protection
FinTech in Africa reflects broader shifts in the global financial ecosystem, where financial products are modularized and embedded within non-financial contexts. This offers new opportunities for customization but also heightens risks of exclusion and exploitation.
The growing “open banking” trend in Africa has the potential to significantly transform the landscape of retail finance by creating pools of shared data that diverse financial institutions can draw upon. By enabling different financial service providers share consumer data, open banking promises greater financial access and product innovation. For instance, banks in Africa increasingly use open APIs to facilitate services such as WhatsApp banking, allowing users to perform transactions via chat interfaces on their mobile phones (Kimeria 2022). This also allows unbanked individuals to leverage data from nontraditional financial sources, such as mobile money accounts, to access formal financial services. However, it introduces new privacy risks as it involves diverse data intermediaries (Medine & Plaitakis 2023). Comprehensive data protection laws are therefore paramount to safeguard low-income consumers in open-finance settings, given the need to coordinate multiple regulatory bodies.
The dynamics of digital finance in Africa underscores the tension between open finance aspirations and the imperatives of data privacy and protection. Rapid digitalization of finance, driven by telecommunications and financial technology firms, raises concerns about the collection and use of consumer data by corporations and governments. While low-income and unbanked populations may benefit from increased financial access, they face heightened risks of privacy violations. The monopolization of data by powerful actors underscores the need for balanced regulatory frameworks that safeguard consumer rights (see Rodima-Taylor 2024).
Although many African nations have introduced data privacy laws, implementation remains inconsistent due to institutional limitations and rural-urban disparities in digital access. African states face considerable challenges in negotiating with financially and technically dominant multinational technology firms. This reflects broader asymmetries of power, highlighting the need for collaborative approaches to data protection that include multilateral and regional frameworks, and engage civil society, governments, and technology firms (Rodima-Taylor 2024).
Social Media, Savings Groups, and Platform Reintermediation
While the layered nature of Africa’s FinTech systems can facilitate financial access, it may also amplify existing inequalities, drawing attention to the need for localized and context-sensitive governance frameworks. For example, social media platforms and digital finance apps play a growing role in mediating Africa’s informal finance, where WhatsApp is widely used to organize rotating savings and credit associations (ROSCAs). The platform’s accessibility and functionality enable users to pool resources quickly and coordinate financial activities that often include mobile money.
However, the integration of digital platforms into informal economies introduces new risks. Scams, fraud, and data exploitation are frequent digital savings groups, eroding trust and undermining their potential benefits. The digital ROSCAs often exist in ambiguous spaces that lack regulatory oversight, exposing users to fraud and Ponzi schemes. The shift from in-person interactions to virtual platforms removes essential social safeguards, such as peer pressure and multiplex ties. This has resulted in a proliferation of scams, with ample evidence from countries such as Kenya and South Africa, where pyramid schemes may masquerade as digital savings groups. The virtual savings groups can thus exploit trust in traditional systems while creating opportunities for deception, reflecting the tension between empowerment and vulnerability in digital financial spaces (Rodima-Taylor 2023).
Despite these challenges, WhatsApp savings groups remain a viable alternative to formalized financial inclusion tools, which have yet to gain widespread adoption (see also Rodima-Taylor 2022). The platform’s ability to combine traditional practices with modern technology underscores its dual role as both a facilitator of community-based financial systems and a potential avenue for exploitation. The reintermediation of finance through digital platforms thus often amplifies power asymmetries. Large technology firms, predominantly based in the Global North, monetize transactional and personal data while local users bear the costs of fraud and exploitation. At the same time, social media platforms also enable new forms of connectivity and collaboration, blending customary financial practices with market-oriented innovations. To harness the transformative potential of digital savings groups, policymakers and stakeholders should address these risks through targeted education, robust consumer protections, and equitable platform governance.
The FinTech future
The FinTech sector in Africa presents a complex mix of opportunities and challenges, as well as benefits, risks and harms, shaped by historical legacies, global power dynamics and business interests, and local economic and cultural practices. While FinTech has expanded financial access, its rapid growth has also exposed significant vulnerabilities, including privacy violations and systemic inequalities. It has also contributed to mental harm, particularly among over-indebted users in low-income groups who struggle to repay loans and interest. Addressing these issues requires thoughtful adjustments to the political and regulatory frameworks that have shaped the current FinTech landscape on the continent. A multi-stakeholder approach is essential to balancing innovation with accountability.
As Langley and Leyshon (2022) note, African FinTech platforms often reinforce economic and social inequalities rooted in colonial legacies. By incorporating previously excluded populations into global capitalism, these platforms often rely on exploitative products like high-interest loans and data commodification. While they present an empowering narrative, they profit from the very inequalities they claim to address and can mask racialized exploitation.
As digital platforms continue to reshape financial landscapes, it is crucial to consider the diverse actors (foreign and domestic) and narratives that influence their development. Our article explores the contrasting views on FinTech in Africa—from its portrayal as a tool of empowerment in mainstream media to its critical examination by scholars uncovering systemic risks. By highlighting these perspectives, we stress the need to interrogate the power structures, histories, and legacies shaping the sector’s evolution.
As outlined in this article, potential pathways for future research include exploring the intersection of digital finance and informal economies, fraud and anti-fraud measures, the gendered dimensions of financial inclusion, and data governance in protecting marginalized communities. We emphasize the importance of recognizing the role of local actors in shaping alternative financial systems and advocate for more context-sensitive approaches to understanding and regulating FinTech in Africa.