• M-PESA evolves into major financial platform with 35 million users

• Telecoms, fintechs expand into banking, intensifying competition with banks

• Data-driven credit models give telcos edge in underserved markets

Fifteen years ago, a banker in Nairobi might have dismissed the idea that a mobile network operator could become his main competitor. Today, that same banker may be tracking Safaricom’s performance with growing concern. M-PESA, the Kenyan group’s mobile money platform, now has more than 35 million active monthly users in Kenya.

M-PESA no longer limits itself to money transfers. It offers credit, savings, insurance and wealth management services. Leveraging its market position, it supports dozens of mini-applications across agritech, e-commerce and healthcare. The shift is visible in the numbers. M-PESA accounted for 31% of Safaricom’s revenue in 2021. By 2025, that share had risen to 42%, according to McKinsey & Company. In less than a decade, Safaricom has evolved from a telecom operator into a financial institution built on mobile infrastructure.

When digital credit surges

This transformation is not unique to Kenya. It reflects a broader trend reshaping financial services across Africa, particularly in East Africa. Digital credit grew by 32% in Kenya between 2020 and 2024. Even more striking, demand for digital lenders increased fivefold between 2023 and September 2025. These growth rates far exceed what traditional banks, constrained by collateral requirements and slower processes, can sustain.

Incumbent banks are responding, but often without a clear strategic direction. KCB acquired a majority stake in Riverbank Solutions, a local fintech. Equity Bank and KCB have accelerated regional expansion to maintain scale. Nigeria’s Access Bank acquired the National Bank of Kenya in 2025. South Africa’s Nedbank announced in early 2026 a bid for around 66% of NCBA Group, positioning Kenya as a gateway to East Africa.

At the same time, telecom operators are moving deeper into financial services. MTN has secured shareholder approval to separate its mobile money business from its telecom operations. Airtel Money Kenya already operates under an independent financial license and is preparing for a 2026 IPO.

In West Africa, the same pattern is emerging. Wave established Wave Bank Africa S.A. in August 2025 with capital of 20 billion FCFA ($35.2 million) and is awaiting BCEAO approval to launch full banking operations. Orange Bank Africa, created in partnership with NSIA, is already active and has issued more than 500 billion FCFA in loans to over 2 million customers since 2020. Less visible but equally aggressive, Axian, operating in 19 countries under the MVola, Mixx and Yas brands, rebranded its financial arm as AXIAN Digibank & Fintech in November 2025 and obtained a digital banking license in the Comoros in February 2026. The group aims to support one million SMEs by 2030. This is no longer simple diversification; it marks a structural shift.

Nigeria illustrates a similar dynamic through a different trajectory. Long dominated by large institutions such as Zenith, GTBank, Access Bank and UBA, the market is now being reshaped by fintech players. OPay has surpassed 50 million downloads, while Moniepoint is competing directly with leading banks in merchant acquisition. Both platforms now integrate savings, credit and business management tools.

Across the continent, from Nairobi to Dakar, including Lomé and Antananarivo, telecom operators and fintechs are becoming central to the financial system. The shift is unfolding market by market and license by license.

The real advantage of telcos: data

The key differentiator is not technology. Large banks are also investing heavily in digital platforms. The advantage lies in data. Telecom operators hold detailed records of transaction patterns, geolocation, network usage and customer behavior, datasets that traditional banks do not possess.

These data enable alternative credit scoring models capable of assessing borrowers without prior banking history. According to McKinsey, this is precisely where fintechs and telecom operators have gained a decisive edge: financing SMEs and underserved populations.

For years, the dominant narrative emphasized complementarity. Telecoms handled distribution while banks provided balance sheet strength and regulatory backing. Each focused on its core role. That model defined more than a decade of mobile money development in Africa.

It is now breaking down, gradually but deliberately. Wave initially partnered with UBA due to licensing constraints. It later secured regulatory approval, raised significant funding and established Wave Bank Africa S.A., whose banking license is currently under review. Partnerships increasingly appear to be transitional. What banks once enabled, they now compete against.

Traditional banks retain key advantages, including strong balance sheets, institutional credibility and regulatory expertise. However, time is not on their side. Month after month, telecom operators deepen customer relationships that banks struggle to reclaim.

Fiacre E. Kakpo