African fintechs hoping to sign up the continent’s next billion users will need to rethink the industry’s long-running growth playbook, according to Musty Mustapha, Managing Director of Kuda Microfinance Bank, who says cashbacks and incentives may drive downloads but rarely help build sustainable businesses.

Kuda MFB MD

Speaking at a fintech panel discussion on scaling digital financial services across Africa at Tech Revolution Africa, a gathering of tech leaders, investors, operators, and professionals which was held at Landmark Event Center on January 31, 2026, Mustapha objected to what he described as the “growth at all costs” culture which has defined much of African fintech so far. While incentives can quickly inflate user numbers, he said they often fail to create the kind of trust and consistent usage that keeps customers long term.

“It is easy to buy users,” he said. “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. In that environment, Mustapha argues that reliability, not marketing spend, will determine which fintechs endure.

Contrary to common assumptions, he said African consumers are not resistant to technology but cautious, shaped by years of unreliable services and weak infrastructure. Products that work seamlessly elsewhere often struggle locally because they fail to account for that trust deficit.

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

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,” he said. “You can wake up and suddenly have a huge spike in users. If your systems and people aren’t ready, you crumble.”

In his view, the strain on a fintech typically shows up first behind the scenes, not on its app. 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. Founders, he said, often underestimate these 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 said.

External constraints add more complexity. 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 said companies must design around them by building redundancies and multiple pathways for critical services.

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

As traditional banks, telcos, and startups increasingly compete for the same mass-market customers, Mustapha expects the winners to combine the strengths of each group — the capital base of banks, the distribution reach of telcos, and the speed of fintechs. But regardless of the model that dominates, he believes the fundamentals will remain the same.

For millions of first-time or underserved users, the deciding factor is simple: whether the service works every time.

“There’s this idea that the average customer can’t use sophisticated products,” he said. “That’s not the issue. What they want is something they can trust.”

As fintech chases its next phase of growth, trust, rather than incentives, may prove to be the sector’s most valuable currency.

Majority Nigerians do not trust the government to properly utilise their tax payments for good use, according to a survey by SBM Intelligence across nine cities.

The survey highlighted why recent tax reforms have triggered widespread anxiety and resistance.

“Survey data from 200 respondents across nine cities indicate that 68.5 percent of Nigerians completely distrust the government’s use of tax revenues, whereas only 27.5 percent view the reforms as beneficial to the country, ” SBM intelligence said in its recent report titled Taxing Patience.

Nigeria’s 2025 Tax Reform Acts took effect in January, introducing the most comprehensive overhaul of the tax framework in decades. The reform has created more awareness among Nigerians than ever before, increasing their further distrust in the government’s use of tax revenues.

The distrust reflects years of poor service delivery and weak accountability, shaping public doubt toward the new tax system despite assurances that the reforms are designed to ease burdens and improve fairness.

“In the past, people avoided tax because they felt the government wouldn’t provide basic amenities,” businessday quoted Okanlawon Hakeem, a Lagos-based businessman, as saying.

“You drill boreholes yourself, pay for public transport yourself, and sometimes fix your local road yourself. So, you ask yourself what the government is doing with the tax money.”

The SBM Intelligence report noted that access to reliable electricity, improved security and better roads were the clearest signals that would make tax compliance worthwhile.

“46 percent of participants identified improvements in roads and security as their primary motivation for tax compliance,” SBM Intelligence noted, explaining that service delivery, rather than enforcement alone, is likely to shape taxpayer behaviour.

Government officials have defended the changes as necessary to improve public finances and reduce Nigeria’s dependence on oil revenue, pointing to the country’s historically low tax-to-GDP ratio.

With a tax-to-GDP ratio of less than 10 percent, Nigeria has lagged behind regional peers such as Ghana and Kenya. Taiwo Oyedele, chairman presidential fiscal policy and tax committee, hopes the reforms will lift the ratio toward 18 percent over the medium term.

Public sentiment, however, has not moved in step with these fiscal ambitions. According to the report, only 27.5 percent of people believe that the new tax laws are good for the country.

The report also suggests that greater awareness of the reforms often coincides with stronger skepticism rather than acceptance.

Distrust cuts across regions and occupations but is especially pronounced in major commercial centres.

The report mentioned that people in Lagos and parts of the Northeast have the strongest resistance and protest sentiment, reflecting concerns about enforcement, fairness and legislative integrity.

In its Year Ahead 2026 outlook, SBM Intelligence projects that protests are likely as the real impact of the new framework becomes clearer. The report points to the June 2024 youth-led protests in Kenya, which resulted in a reversal of the policy.

In Nigeria, where inflation is only just beginning to show signs of easing, the tolerance for perceived government excesses, including lavish convoys and budget padding, is at an all-time low.

Business owners, traders and informal workers expressed particular unease, fearing the reforms could deepen the problem of double taxation. Many worry that government levies will exist alongside rather than replace the fees already collected by unions and non-state actors.

“ Nearly a third of business respondents said they expect to pay both official taxes and union fees,” the report stated.

For informal workers such as market traders, drivers and artisans, this fear is grounded in experience. Many already make daily payments to unions or associations, often under pressure.

Without a clear plan to eliminate these parallel charges, new government taxes are widely viewed as an additional burden rather than a simplification of the system.

In Lagos, Kano and Onitsha, constant electricity emerged as the strongest trigger for compliance. In Abuja, Port Harcourt and Bauchi, respondents prioritized roads and security. Across cities, the message was consistent: willingness to pay is conditional on visible outcomes.

Analysts warn that without clear improvements in service delivery, stronger enforcement could harden resistance rather than improve compliance.

The report stated that without rapid, visible improvements in public services, the government risks collecting more money while winning.

Femi Otedola, group chairman, First Bank Holdings, has justified the company’s decision to write off N748bn in legacy non-performing loans, saying the move was a deliberate strategy aimed at securing long-term financial stability, even though it significantly reduced reported profits.

Femi Otedola, group chairman, First Bank Holdings,

Otedola made this known in a post on his X handle, where he explained that the large-scale provisioning led to a 92 per cent drop in the holding company’s profit figure.

According to the billionaire investor, the write-off was in line with the Central Bank of Nigeria’s directive encouraging banks to confront non-performing loans openly instead of postponing the issue.

“At First HoldCo we decided to clean house properly. We took a huge one-time hit of N748bn to admit old bad loans instead of pretending they do not exist. That is why profit looks like it crashed by 92 per cent. Painful headline, but it is a serious long-term move,” he wrote.

He noted that the decision was taken to finally address problematic loans accumulated over previous years and to strengthen confidence among stakeholders.

“Why do this now? Because the CBN is pushing banks to stop kicking problems down the road. So First HoldCo basically closed the chapter on messy loans from past years which sends a clear message that borrowing has consequences and it helps rebuild trust,” Otedola added.

Despite the scale of the write-off, Otedola maintained that the bank’s core business remained solid, stressing that strong earnings demonstrated the institution’s underlying financial strength.

He disclosed that the bank generated N2.96tn in interest income and N1.91tn in net interest income, figures he said were sufficient to absorb the clean-up while keeping operations stable.

“The key point is this: our business itself is STILL strong. It made N2.96tn in interest income and N1.91tn in net interest income, which gave it the strength to take the cleanup and still stay standing,” he stated.

Looking ahead, Otedola expressed confidence in the bank’s future, saying the balance sheet clean-up has positioned First Bank well for recapitalisation and sustained growth.

“Now at First Bank and beyond we go into 2026 lighter, cleaner and better prepared for the recapitalisation era and serious growth. Bad loans cleared + strong income engine + long-term thinking = real value creation,” he concluded.