African fintech: From USSD to smartphone apps and beyond

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SIMON BROWN: I’m chatting with Adesoji (Soji) Solanke, head of Fintech and Banks investment banking origination at Absa CIB. Adesoji, appreciate the time. African fintech – I want to say it’s on the rise, maybe on the re-rise.

We had two fintech listings last year: Optasia locally, Cash Plus in Morocco. My sense is both are showing improved potential but also investor appetite. It shows confidence in the sector, its ability to scale, its ability to create real liquidity events such as the listing. They were both big stories.

ADESOJI SOLANKE: Yes, that’s correct. First, thank you for having me on this discussion today. So yes, that’s correct.

Those two assets did come to the public market in 2025, and essentially what you’ve seen is two scaled businesses that had previously been backed by private capital now exploring an exit for those investors. One of the listings happened in South Africa, on the JSE, and the other in Morocco.

The other interesting thing you find is in terms of the nature of investors that came into both companies. It was a combination of domestic, retail and institutional capital – but also international investors.

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I’ll say significantly more international investor participation on the JSE listing, and on the Moroccan side relatively more participation on the domestic side, just given the nature of development of that market as well. Just important differences to keep in mind.

But the main thing here is that skilled opportunities are essentially finding exit routes via African capital markets, and that’s a trend which is happening for large fintech companies and long may it last.

SIMON BROWN: Agreed, long may it last. Are there potential more listings out there, or maybe other sorts of corporate activity? I’m thinking maybe mergers and acquisitions and the like. These are unlikely to be isolated events.

ADESOJI SOLANKE: That’s correct. Certainly not isolated events. So if you take a step back, what you also have to keep in mind is the quantum of capital that has been invested in African fintech companies over the last 10 years.

The number we are talking about is north of $20 billion. So from that perspective it’s only natural to expect that there are certain scaled opportunities now or, let’s say, companies where entrepreneurs have built very successful businesses that are profitable, growing, and gaining market share.

And it’s only natural for the investors that have backed them for all these years to consider an exit opportunity. So that’s one thing.

From an exit perspective, yes, capital markets, but also M&As [merger and acquisitions]; and from the M&A perspective that is certainly picking up as well.

South Africa, unsurprisingly, is leading the charts in terms of M&A activity in the fintech space in Africa. There has been significantly more activity where you’re finding large incumbent players – whether it’s in banking, retail or even in the fintech space – actually acquiring other technology companies on the continent.

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There’s also, to a limited extent, some cross-border activity; but this is still intra-Africa M&A. There are more limited international into-Africa technology M&A deals happening.

So the key summary is that there’s significantly more domestic in-country M&A happening; to more limited extent intra-African M&A, and to a much smaller extent international Inter-Africa M&A on the tech side.

SIMON BROWN: Gotcha, gotcha. And what are the main sectors within African fintech? My sense is payments. My sense is probably lending. But payments goes all the way back to the original sort of M-Pesa.

ADESOJI SOLANKE: Correct. A combination of those two – so yes, payments, yes, credit. But the unique thing about Africa is that the nature of the business models that have been built within this segment are also quite unique, and perhaps quite different from what you find in other developed markets.

So that also just means that as an investor looking to get a deal done in Africa you need to make sure you walk with advisors who really understand the nuances of the business models that are quite unique in an African context. And that’s one of the main areas where we spend a lot of our time guiding our clients.

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So there are just more nuances when it comes to Africa – the number of countries, the variances in the business models. You’ve mentioned two big categories being payments and credit. But even underneath those umbrellas there are just so many unique business models that have been built within those categories.

Mobile Money is also another large segment as well – large, growing and profitable businesses. I think for international investors this is also an area where there’s a lot of explaining perhaps required, just to explain how unique these business models are in an Africa context.

SIMON BROWN: I take your point around that. I’m thinking in the US, for example, there’s PayPal, there’s Venmo. But those are kind of app-based, whereas you have Mobile Money, we have M-Pesa – the process around there. There’s ultimately the same outcome, but a very different road as to how we get there and how we’ve used ingenuity to solve problems.

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ADESOJI SOLANKE: Yes. And you’ve hit the nail on the head, and the reasons for those differences should not be surprising because when you look at the developed markets you’re talking about, say, the United States – so smartphone penetration, bank internet penetration and ATM penetration is extremely high.

When you come to Africa, the infrastructure for cash-in, cash-out is actually not ATMs. We do have ATMs, don’t get me wrong. But the most skilled infrastructure for cash in, cash out is actually agent networks that are typically owned by either telecoms companies or financial technology companies.

The magnitude of difference in terms of number of ATMs per 100 000 adults in Africa is maybe like four to five ATMs for every 100 000 adults. But for the agent network, I’m talking of 20 to 30 agents for every 100 000 adults.

So that’s just a magnitude of difference when it comes to the cash in, cash out infrastructure that you find in Africa for the agent network vis-à-vis the bank ATM infrastructure.

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So, given what I’ve just described, and how important it is when it comes to digital payments, you first of all need to be able to have the infrastructure to digitise cash – and in Africa that is largely being done by the Mobile Money agent network.

But you’re also finding out that how the customers then transact once money sits in that wallet has historically been very USSD [Unstructured Supplementary Service Data] based – also because there just have been more 2G, 3G phones in the hands of African consumers. But that is changing.

This is where the long-term growth trajectory of Africa is quite exciting, because as more people evolve from 2G, 3G, USSD to more app-based models, there just are more digital transactions.

That also continues to happen as internet penetration continues to increase. Smartphones become cheaper; internet costs get cheaper as well. Urbanisation rates also continue to improve.

There’s just a significant flywheel effect that helps to drive the growth across the entire ecosystem. That’s definitely the trend that we’re finding happening across quite a number of African countries so far.

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SIMON BROWN: Absolutely. It’s that flywheel, as you say, and it just gathers momentum.

We’ll leave that there. – Adesoji Solanke, head of Fintech and Banks investment banking origination at Absa CIB, appreciate the time.

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