Building inclusive financial systems is essential to reducing poverty and supporting equitable economic development. Yet in many African countries, large segments of the population, especially women, youth, and informal workers, remain underserved by formal financial institutions. Conventional banking models and credit assessment tools often fail to reflect the realities of these groups, making it harder for them to access the financial products that could help grow their businesses or stabilize their income.
In response, innovators across the continent are using fintech to develop more relevant and accessible financial solutions. In Kenya, for example, a WhatsApp-based reporting tool is helping micro-entrepreneurs manage their operations, make informed decisions, and qualify for financing by producing the documentation required by banks. In Togo, a new AI-enabled model builds on traditional tontine systems to improve the transparency and scalability of community-based savings and lending.
This webinar featured speakers from Togo and Kenya who are directly involved in developing and implementing these tools. They shared lessons from their experiences and reflected on how fintech can be used by actors of the ecosystem to serve the needs of SEED entrepreneurs:
- Thomas Houngbedji: Country Deputy Manager (Togo) - Expertise France
- Celestine Otieno: Partnerships Lead - Somo Africa
- Leonidah Mwato: Software Developer - Somo Africa
- Mindi Lamboni: Manager - Technology Accelerator Program for the Creation of Innovative Clusters
Key themes and takeaways
The panel discussion highlighted practical examples of how fintech can support more inclusive financial models for SEED entrepreneurs. While each context and tool was distinct, several cross-cutting themes emerged around the design, use, and impact of these solutions. Below is a summary of the key insights shared by panelists, grounded in their experiences developing and implementing fintech tools in Kenya and Togo.
Fintech as a tool to bridge the inclusion gap
Across African markets, traditional financial institutions often overlook SEED entrepreneurs due to perceived credit risks, lack of formal documentation, and informal operations. Fintech tools like DigiKua and AI-enabled tontine apps are helping to bridge this gap by capturing alternative data, facilitating digital record-keeping, and connecting entrepreneurs with formal finance.
Designing with, not for, entrepreneurs
Both case studies emphasized co-creation with local entrepreneurs. DigiKua was developed based on feedback from entrepreneurs in Nairobi, Kisumu, and Mombasa, prioritizing usability, low-data environments, and simplicity. Similarly, the digital tontine in Togo was co-designed with communities, incorporating multilingual features and trust-building mechanisms.
From informal to formal: making entrepreneurs finance -ready
Tools like DigiKua help SEED entrepreneurs generate business records, monitor performance, and present alternative indicators of creditworthiness. This supports their transition toward eligibility for formal financing. In Togo, AI-powered analysis of savings and lending behavior is enhancing access to microfinance for informal groups.
Trust, adoption, and literacy matter
Adoption of digital tools depends on trust, especially in communities with limited digital exposure. In Togo, they built trust through local leaders, training in local languages, and transparent AI algorithms. In Kenya, Somo used peer ambassadors and coaching programs to build user confidence and uptake.
Reimagining risk through alternative credit scoring
Traditional credit models exclude many SEED businesses. Somo’s work on a qualitative credit assessment model shows how fintech data (e.g., consistency in record-keeping, business health indicators) can be used to assess creditworthiness and engage financial institutions in rethinking risk.
Simple, scalable, context-appropriate tech
Both tools shared in the webinar were built to be lightweight and practical. This reflects a key insight: innovation doesn’t need to be high-tech, it needs to be responsive. Voice interfaces for non-literate users and low-bandwidth apps are helping reach groups often left out of fintech advances.
Role of partnerships in scaling inclusive finance
Partnerships were central to both efforts. Somo worked closely with financial institutions and entrepreneurship hubs to disseminate DigiKua and align on credit criteria. The digital tontine initiative collaborated with NGOs and cooperatives to embed the tool in existing savings cultures. Both stressed that funders and ESOs have a role in building trust and facilitating adoption.
Additional resources
Rapport 2024 de la BEI sur la finance en Afrique
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