E-Financial
Incentives alone won’t win over Africa’s next billion fintech users — Kuda MFB MD
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.
The Central Bank of Nigeria in its 2025 Fintech Policy Insight Report, has raised concern over Nigeria’s fintech sector heavily dependent on foreign investment, exposing it to swings in global markets.
The report said the sector has shown resilience despite global economic pressures, but warned that reliance on external capital leaves it vulnerable to market fluctuations.
It would be recalled that startups in the country raised $520m in equity funding in 2024, down from about $747m in 2019, when Nigeria captured roughly 37 per cent of all African startup investment.
This performance, amid significant global macroeconomic gyrations, underscores Nigeria’s position as a key hub for financial innovation. The sharp rise in interest rates in advanced economies during 2022 contributed to a slowdown in venture capital funding.
“These dynamics highlight the importance of developing domestic funding avenues, such as leveraging Nigeria’s capital markets, to reduce currency risk and sustain fintech growth,” the apex bank stated.
Olayemi Cardoso, CBN Governor, said Nigeria is undergoing a rapid and significant financial evolution. Over the past decade, the nation’s fintech landscape has grown from a handful of startups into one of Africa’s most vibrant innovation ecosystems.
“Even amid global economic headwinds, Nigerian fintech firms continued to attract investment and drive change. Today, with improved stability of our currency and domestic economy, it is clearer than ever that financial innovation can advance inclusion at scale,” the executive commented on the report.
In addition to funding, the central bank underscored Nigeria’s continued leadership in digital financial infrastructure. More than 25 per cent of all electronic transactions in Africa’s most populous nation are processed via real-time payment channels, with close to 11 billion transactions processed in 2024, up from five billion in 2022. The report described Nigeria’s instant payments platform, NIBSS NIP, as among the most mature and widely adopted globally.
The report also mentioned the need to strengthen system integrity and reputation, pointing to compliance reforms, anti-money laundering supervision, and consumer protection measures as key priorities for sustaining investor confidence.
By focusing on domestic funding, regulatory modernisation, and innovation infrastructure, the CBN aims to position Nigeria not only as a fintech front-runner but also as a rule-setter whose regulatory lessons are relevant to peer emerging and high-growth economies globally, the central bank said.
Stakeholders surveyed by the CBN also cited compliance costs as a significant challenge to innovation. According to the report, 87.5 per cent of respondents said that the cost of meeting regulatory and risk requirements significantly impacts their capacity to innovate, while delays in product approvals and regulatory timelines also remain major bottlenecks.
The report noted that 62.5 per cent of fintech firms plan to expand regionally, and there is strong support for regulatory pass-porting frameworks to enable compliant expansion into other African markets. However, the CBN warns that such cross-border growth requires a stable funding base and coordinated regulation.
After a few years abroad, I returned to Nigeria and faced a dilemma. Let me tell you all about it.
UBA
A few days ago, I was dragging my luggage through Murtala Muhammed International Airport. Everything felt bright and beautiful. Not necessarily in aesthetics, but in the vibrant colours, sounds, and energy all around. After three intensive years in the UK, I was finally back home. Ready for the hustle and bustle of Lagos life, and yes, the comfort of my parents’ home.
The plan was simple. Settle down and get my life on track. I’d sorted the job, and I had my person. But then came my dilemma. Money!. This doesn’t mean I was short of it or had too much of it. The real issue is where to actually keep and manage it in this country with daily dramatic happenings. With just two weeks left before I resumed at my new workplace, I had no time for long queues, endless paperwork, or the classic “Nigeria bank stress.” So, I needed an account, and I needed it fast.
So I turned to my best friend, Google, and typed, “Instant account opening in Nigeria.”
In less than a second, I was redirected to the United Bank for Africa instant account opening portal. A few taps later, and I had a fully functional account. Just like that. I could receive my funds, transfer my funds, and start building my financial life here again.
In less than a second, I was redirected to the United Bank for Africa instant account opening portal. A few taps later, and I had a fully functional account. Just like that. I could receive my funds, transfer my funds, and start building my financial life here again. Talk about ease, and this beautiful experience truly exemplified that definition
I was genuinely amazed. It felt too easy, almost suspiciously easy. But it was real, I mean, really soft like they were just thinking all about me while developing this new feature.
If you’re like me and pressed for time, avoiding unnecessary stress, or just ready to sort your finances without the hassle, consider this your sign.
UBA’s instant account opening is a game-changer. No queues to cut into your precious time. Just you and your phone, minutes away from being banked.
Get started here: https://aop.ubagroup.com
Trust me, if I could do it between unpacking and settling in, you can do it too. Your future self will thank you.
Bank of Industry (BOI) has received Central Bank of Nigeria (CBN) approval to launch a Non-Interest Banking (NIB) Window, expanding ethical financing for underserved businesses nationwide.
BOI
The move positions BOI to mobilise Sharia-compliant funds, finance assets and raw materials without interest, and target MSMEs plus high-impact sectors previously sidelined by conventional loans.
Divisional Head of Public Relations, Theodora Amechi, said the window aligns BOI with social goals, boosting real economy support and sustainable industrial growth.
MD/CEO Dr. Olasupo Olusi hailed it as a “pivotal moment,” enabling the bank to serve faith-sensitive enterprises shunning riba-based loans.
Analysts see it as CBN’s vote of confidence in BOI’s governance, set to spur innovation and inclusive financing for Nigeria’s ethical business segments.
Established in 1959 as Nigeria’s top Development Finance Institution, BOI now strengthens its drive for broad-based economic transformation.
FG Launches the Happy Woman App Platform
Lasaco Assurance Gets Shareholders Approval to Advance Capitalization Plans
Ecobank Nigeria to Host Customer Forum on Strengthening Regional Integration for Economic Transformation
Lagos to Establish West Africa’s Premier International Financial Centre
Safer Internet Day: Sophos Warns – 42% Attacks Hit Stolen Logins in 2025
Firm Detected a Fivefold Surge in QR Code Phishing Attacks in the Second Half of 2025
US invests $115m in counter-drone tech for World Cup security
Nigerian Terra Industries Secures $11.8m for Expansion
Nigeria Targeted with 4,622 Cyber-attacks Per Week in December 2025
Firm Detected a Scam Exploiting OpenAI’s Teamwork Features
E-Financial2 days agoAlawuba Advocates Security, Bankable Projects, Infrastructure Development to Promote South-East Vision
Telecom1 day agoNCC Committed to Regional Digital Integration – Maida
E-Financial1 day agoCBN Expresses Concern Over Foreign Investments in Nigeria Fintechs
General News1 day agoIndigenous Firm Deploys 400,000 Smart Electricity Meters in 2025
E-Financial1 day agoBOI Secures CBN Nod for Sharia Banking, Unlocks Ethical Funding Boom
Telecom1 day agoITU Top Director Visits NITDA, Boosts Nigeria’s Digital Literacy Push
E-Financial1 day agoUBA’s Easy and Instant Account Opening Thrills Returnee
News1 day agoEFInA Unveils Research Fellowship Programme to Deepen Financial Inclusion Impact