African fintech startups seeking to onboard the continent’s next billion users will need to rethink their long-standing growth strategies, Musty Mustapha, managing director of Kuda Microfinance Bank, has said.
He stated this while speaking at a fintech panel on ‘scaling digital financial services across Africa’ during the Tech Revolution Africa conference in Lagos, adding that the growth at all costs’ mindset has shaped much of the sector’s expansion.
While incentives can quickly inflate user numbers, 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.”
This comes as African startups face mounting pressure to improve unit economics amid tightening venture capital funding. Investors are increasingly prioritising profitability, retention, and operational efficiency over rapid user acquisition, forcing fintechs to reassess how they scale.
Mustapha noted that reliability and trust are important in that environment, rather than marketing spend, which will ultimately determine which companies endure.
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He stated that African consumers are not resistant to technology but cautious, shaped by years of unreliable services, power shortages, and fragile infrastructure. As a result, products that work seamlessly in more developed markets often struggle locally when they fail to account for this trust deficit.
“They’re not digitally naive,” he said. “They’ve just operated in low-trust environments. If something fails even once or twice, you lose them.”
He noted that the pressure of rapid growth often first appears in backend operations rather than customer-facing platforms and functions such as reconciliation, chargebacks, and customer support can quickly become bottlenecks, undermining service reliability and eroding trust.
“Anything you don’t pay attention to in your first six months will come back to hurt you at scale,” he said.
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As competition intensifies among fintechs, traditional banks, and telecom operators for mass-market users, Mustapha expects future winners to blend the strengths of all three, which include banks’ capital, telcos’ distribution networks, and fintechs’ speed and innovation.
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