Banks, fintechs must collaborate to unlock Africa’s next billion fintech users — Kuda MFB MD

Musty Mustapha, managing director, Kuda Microfinance Bank, says banks and fintechs must collaborate to unlock Africa’s next billion fintech users as funding tightens across the continent.

According to him, African fintechs hoping to sign up the continent’s next billion users will need to rethink the industry’s long-running growth playbook.

“There’s this idea that the average customer can’t use sophisticated products. That’s not the issue. What they want is something they can trust,” Mustapha stated during the scaling digital financial services across Africa at the Tech Revolution Africa, held recently in Lagos.

He stated that incentives can quickly inflate user numbers, but often fail to create the kind of trust and consistent usage that keep customers long term.

“It is easy to buy users. But if you grow without creating real value, you’re only solving for today’s numbers and ignoring whether the business survives tomorrow.”

His comments come at a time when many startups are under pressure to demonstrate stronger unit economics as venture funding tightens and investors shift attention from rapid acquisition to profitability and retention.

Mustapha argued that reliability, not marketing spend, will determine which fintechs endure. He added that

African consumers are not resistant to technology but cautious, shaped by years of unreliable services and weak infrastructure.

According to him, products that work seamlessly elsewhere often struggle locally because they fail to account for the trust deficit among users.

“They’re not digitally naïve. They’ve just operated in low-trust environments. If something fails even once or twice, you lose them,” he stated.

He disclosed that focus on trust has influenced how Kuda Microfinance Bank has approached its growth.

Launched in 2019 as a digital-first bank, it expanded from roughly 100,000 customers within its first year to nearly 300,000 the next, before surging past 2 million customers in 2021.

Today, the microfinance bank serves more than 7 million Nigerians, Mustapha said, describing the journey as less predictable than the numbers suggest.

“The reality is, you can’t forecast scale neatly. You can wake up and suddenly have a huge spike in users. If your systems and people aren’t ready, you crumble,” Mustapha stated.

He stated that as volume increases, back-office functions such as reconciliation, chargebacks and customer support can quickly become chokepoints, eroding the trust that fintechs are trying to build.

According to him, founders often underestimate operational demands in the early days while prioritising product development.

“Anything you don’t pay attention to in your first six months will come back to hurt you at scale,” he stated, explaining that external constraints add more complexity.

According to him, payment rails, power supply, and connectivity remain outside the control of most fintechs, making outages and delays inevitable.

Rather than trying to outspend those limitations, Mustapha stated that companies must design around the constraints by building redundancies and multiple pathways for critical services.

“You don’t assume perfection. If one channel fails, there must be another. That’s how you stay reliable.”