What do a mobile money user in Lusaka, a digital borrower in rural Kenya, a small business owner in Johannesburg, and a family sending remittances from London have in common? Each is caught in a structural friction that four new research papers now explain with unusual clarity. The papers – from Zambia, East Africa, the South African Reserve Bank, and the Bank for International Settlements – do not simply describe problems. They offer tested solutions. For African financial services leaders, the question is no longer what works. It is who will act first.
These are not four separate problems. They are four symptoms of the same structural reality. African financial systems are expanding rapidly, but inclusion, risk management, cross‑border efficiency, and data sharing remain deeply fragmented.
Four new research documents – from Zambia, East Africa, the Bank for International Settlements, and the South African Reserve Bank – offer a unified roadmap. Read together, they reveal a continent at an inflection point. The technologies exist. The evidence is mounting. The question is whether financial services leaders will act with the discipline the moment demands.
Zambia: Transactional FinTech leads, but savings and credit lag
A study of FinTech users in Lusaka District, Zambia’s economic hub, provides granular evidence of how different digital services affect inclusion. Mobile money dominates, with 75% of respondents actively using platforms such as MTN Mobile Money and Airtel Money for transfers, bill payments, and savings. Convenience and accessibility drive adoption, with 60% of users citing the ability to transact without visiting a bank branch.
Digital credit reaches 15% of users, primarily for microloans supporting small businesses or personal emergencies. These services are valued for speed – loan disbursement often within 24 hours – and for serving informal sector workers who lack collateral. However, 20% of users raised concerns about limited loan sizes, unclear repayment terms, and multiple concurrent loans, highlighting the risk of over‑indebtedness.
Savings services lag significantly. Only 15% of respondents actively use digital savings products. Among non‑users, 30% mistrust platform security, and 20% are simply unaware that such services exist. For a continent where household savings rates are among the lowest globally, this is a missed opportunity.
Demographic patterns are equally telling. Younger, urban, and tertiary‑educated respondents adopt FinTech at the highest rates. Older, rural, and less‑educated users remain cautious or excluded. Gender disparities persist, though the near‑parity in Lusaka (55% male, 45% female) suggests that targeted interventions can close the gap.
The lesson for African financial institutions is clear. Transactional services build habit and trust. Credit services expand access but require consumer protection and transparent pricing. Savings services need awareness campaigns, security guarantees, and product designs that build confidence over time.
East Africa: How a simple deposit screens out bad borrowers
A randomised controlled trial with a digital lender in East Africa tested an unconventional contract feature. Borrowers applying for a school‑fee loan were randomly assigned to one of two groups. One group was required to make a temporary cash deposit of approximately 20% of the loan amount before disbursement. The other group was not. Crucially, the deposit was fully refunded and did not alter repayment incentives. The only difference was the upfront action.
The results are striking. Take‑up fell from 50% in the no‑deposit group to 30% in the deposit group. But repayment improved substantially. By 200 days, loan completion rates doubled from 31% to 56%. Lender profitability increased by 2.0 percentage points monthly – an annualised improvement of 27 percentage points.
The deposit screens borrowers in two ways. First, higher‑risk borrowers – those with weaker repayment histories or less stable income – are less likely to accept deposit loans. Second, even among borrowers with identical observable risk scores, those who accept deposit loans perform better. The largest performance gaps are among borrowers classified as low risk, suggesting that the deposit reveals unobservable borrower quality that standard credit scoring misses.
For African digital lenders, the implication is profound. Data‑driven credit scoring is not enough. Simple contract features that require upfront action – even a temporary, refundable deposit – can add a powerful screening margin. The challenge is to set deposit levels that deter high‑risk borrowers without excluding creditworthy but liquidity‑constrained applicants.
South Africa: Open banking works, but targeting matters
The South African Reserve Bank’s working paper on open banking uses nationally representative survey data to assess whether data sharing deepens financial inclusion. The findings are nuanced but decisive.
Open banking reduces the incidence of being unbanked and increases bank transaction frequency, life insurance uptake, and credit access. The effects are meaningful. However, when open banking is measured broadly – including screen scraping and payment‑focused platforms – the credit effect is negative or negligible. When measured narrowly – focusing on microfinance online lenders and large non‑bank fintech lenders that use APIs for credit – the credit effect becomes strongly positive.
The paper also finds a troubling result. Credit‑targeted open banking increases the number of unbanked individuals. The literature attributes this to low digital literacy, limited technology access, and credit‑scoring bias that may disproportionately affect marginalised groups. Without proper targeting and consumer safeguards, open banking can replicate existing inequalities.
The policy implication is clear. Open banking is an alternative way to increase participation beyond simply holding a bank account. But policymakers must design policies that enhance digital literacy, enforce sharing of credit information, and ensure appropriate regulation mitigates risks related to consumer data. A market‑led approach has enabled innovation. A transition to a regulator‑led or hybrid model may be necessary to ensure equitable access.
Cross‑border payments: The missing layer
The Bank for International Settlements paper reminds African leaders that domestic inclusion and cross‑border efficiency are two sides of the same coin. Retail cross‑border payments and remittances remain far more costly, slower, and less transparent than domestic payments. The global average cost to remit USD 200 across borders is still USD 12, or 6%, and it can take multiple days.
Correspondent banking – the traditional model – is efficient for wholesale transactions but fails retail users. New models are emerging. Bilateral links between fast payment systems (e.g., UPI‑PayNow) and hub‑and‑spoke systems (e.g., PAPSS, Nexus) offer promising alternatives. These require public sector coordination, harmonised messaging standards (ISO 20022), and alignment of anti‑money laundering regimes.
Distributed ledger technology and stablecoins generate enthusiasm, but the BIS is cautious. Permissionless systems face significant challenges in compliance, supervision, privacy, and scalability. Regulated, interoperable fast payment systems interlinked across borders remain the most practical near‑term solution.
For African financial institutions, the priority is clear. Support regional and continental initiatives such as PAPSS. Align domestic fast payment systems with international standards. Push for harmonised data requirements and compliance regimes. The infrastructure is being built. Institutions that connect early will capture first‑mover advantage.
What African financial services leaders should do now
Four research documents, four distinct angles, one unified conclusion. African financial systems are at an inflection point where technology, evidence, and policy alignment are converging.
The Zambia study shows that transactional FinTech works, but savings and credit products need better design and consumer protection. The East Africa experiment shows that simple contract features – temporary deposits – can screen out high‑risk borrowers without complex algorithms. The South Africa open banking paper shows that data sharing increases inclusion when targeted, but improperly designed regimes can exclude the vulnerable. The BIS cross‑border paper shows that interlinked fast payment systems are the most promising path to efficient continental payments.
For forward‑thinking leaders across African banking, insurance, fintech, and payment systems, the implications are immediate.
First, invest in transactional FinTech as the foundation. Mobile money builds habit, trust, and data. Without it, savings and credit products will struggle.
Second, experiment with contract‑based screening. Data‑driven credit scoring is powerful but incomplete. Temporary deposits, savings‑linked lending, and other upfront actions can reveal borrower quality that algorithms miss.
Third, advocate for targeted, well‑governed open banking. Data sharing increases inclusion when focused on credit and combined with digital literacy programmes. A regulator‑led or hybrid framework may be necessary to prevent exclusion.
Fourth, align domestic payment systems with continental and global standards. PAPSS, Nexus, and ISO 20022 are not abstract technical details. They are the plumbing of the next generation of African commerce.
The evidence is on the table. The question is whether African financial leaders will act with the discipline that the moment demands.
SOURCES:
https://www.preprints.org/manuscript/202602.0888
https://www.bis.org/publ/bppdf/bispap167.pdf
https://www.resbank.co.za/content/dam/sarb/publications/working-papers/2026/26-07/financial-inclusion-sa.pdf