Neo-banking in Africa is accelerating, with new funding rounds, innovative models, and regional expansions driving access to financial services for millions of underbanked people. While investment momentum is strong, questions around regulation, profitability and trust continue to shape the sector’s outlook.
Funding rounds strengthen regional leaders
In West Africa, Côte d’Ivoire-based Djamo has secured US$17 million to deepen its services in Francophone markets. The company now serves over one million users and more than 10,000 small and medium-sized enterprises, many of whom had no previous access to formal banking. Nigeria’s Moniepoint has also reached unicorn status, following a major capital raise that enhanced its payments, lending and FX capabilities. In South Africa, Tyme Group has attracted strategic investment from Brazilian digital bank Nubank to accelerate growth.
Innovations beyond payments
The new wave of African neo-banks is diversifying beyond digital wallets and transfers. A notable example is the “Carbon Neobank” concept, targeting micro, small and medium-sized enterprises in Kenya and Uganda with lending tied to carbon credits. The aim is to lower financing costs while supporting climate-related investments. Hybrid approaches are also gaining traction, combining app-based services with physical agent networks for onboarding and cash handling in regions where branches remain limited.
Challenges in scaling up
Despite strong growth, neo-banks face hurdles in converting scale into profitability. Regulatory differences across markets complicate cross-border operations, while infrastructure gaps, from patchy mobile networks to limited credit data, slow adoption in rural areas. Building customer trust remains a challenge, as financial literacy and awareness vary significantly across demographics.
The future of financial inclusion
With Africa’s banking penetration still below global averages, neo-banks have an opportunity to reshape access to credit and payments. Success will depend on regulatory alignment, stronger risk management, and sustained investor confidence. If these conditions are met, digital challengers could play a central role in extending financial services across the continent, while contributing to both economic development and climate finance.
Newshub Editorial, 11 September 2025
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