Fish market in Senegal. Photo: Wikimedia Commons

After spending 10 years working as a Private Equity investor in the United States at HarvourVest Partners and the Middle-East at the Islamic Development Bank (IsDB), Issam Cheuh is convinced that fintech is the next big thing in financial services in Francophone Africa.

In 2014, 2015 and 2016, Forbes Magazine listed Chleuh as one of Africa’s 30 most promising young entrepreneurs. After his intervention at the 2018 MIT Africa Innovate Conference 2018 “Digitization for Inclusive Growth”, Chleuh shared with us in an interview the reason his team is so bullish on fintech.

By Issam Chleuh

Small and medium-sized enterprises (SMEs) play a crucial role in Francophone Africa, accounting for around 50% of jobs created (source: World Bank).

Francophone Africa is the youngest and fastest-growing sub-region in the world, with Mali and Senegal median age at 16 and 18, respectively. By 2030, there will be 375 million young people looking for jobs in Africa, exceeding the rest of the world combined. (source: IMF); Most of these job seekers will come from Francophone Africa.

A significant gap between the number of young people seeking work and the limited employment opportunities available to them means that they will face challenges finding formal employment and a pathway out of poverty. Boosting SME productivity and growth in the region could result automatically into more employment, higher earnings and a solution to the increasing concern about instability, population pressure, migration and chronic food insecurity in West Africa.


Numerous challenges for SMEs in Francophone Africa

Unfortunately, SMEs still face a number of challenges in Francophone Africa.  The biggest roadblock facing SMEs in the region is access to finance. Without capital, SMEs cannot grow. Without growth, SMEs cannot tackle unemployment properly.

The banking penetration rates in Francophone African countries are among the lowest in the world, particularly in the CFA franc monetary zone. According to the Bank of France, the proportion of adults that have a bank account with a formal institution is only 12.6%. This is considerably lower than the rest of Africa, where around 30% of adults have access to bank accounts (World Bank).

Francophone Africa is lagging behind Anglophone Africa. This is a fact. Francophone Africa accounts for only 19% of sub-Saharan Africa’s average GDP while Anglophone Africa (excluding South Africa) accounts for 47%. When we look at the World Bank’s Doing Business report, the English countries always rank more favorably than the French ones: it is easier to start a business or obtain payment from debtors, for instance.

Moreover, Francophone African countries are lagging behind in terms of basic banking infrastructure and points of access to banking services (low density of ATMs, not enough branches).  The banking system in the region is made up of constrained banks that focus primarily on deposits. This can be explained by the small size of national markets, a lack of financial literacy, low-income levels, political instability and weak judicial systems.

Riskier and costlier to do business in the region

Since the business environment is less healthy, it becomes riskier and costlier to engage in business transactions in the region. This in turns will raise the cost of borrowing and less SMEs would be able to access financing. A cost of borrowing could impact considerably SMEs bottom lines and impair their growth. It is a vicious circle. We need to crack access to financing at the Missing Middle level.

Globally, the FinTech market is projected to grow at 25% from $3,300 billion to 5,082 billion in 2019 (Fintrek, 2017). This boom in fintech emerged from a significant gap globally in the traditional banking and financial services infrastructure.


Africa has shown numerous times it can leapfrog its way out of lack of infrastructure and pioneer disruptive innovations. One of the major challenges facing the entrepreneurs and SMEs in francophone Africa is lack of capital. Bank credit accounts for only 10% of total MSME financing in francophone Africa, with most of the financing coming from informal sources.

When we look at this low rate of financial inclusion in the region fintech emerges as the obvious solutions to this challenge. Prior to the infiltration, diffusion, and widespread adoption of ICT and mobile phone technology in Africa, the success of fintech was inconceivable due to the continent’s lack of communication infrastructure.

Africa jumped various steps in the development curve

The penetration of ICT, technology and mobile phones on the continent offered Africa’s countries opportunities to jump various steps in the development curve. Africa is already circumventing traditional means with technologies such as wireless and mobile technologies that require lower physical infrastructure and investments.

In the absence of landline-based infrastructure, Africa has leapfrogged what was considered the traditional standard evolutionary adoption path of telecommunication technology: the mobile phone. In the absence of enough bank branches and ATMs, Africa has leapfrogged traditional banking to pioneering mobile banking globally.

Additional infrastructure gaps in the Banking sector still persists and hinders the growth of the industry. These infrastructure gaps include the lack of credit history, weak legal system and low financial literacy, among others. Mobile money has been able to address the lack of banking branches and ATMs. Fintech solutions are cracking solutions to the other issues facing, including lack of collateral.

But much of the growth is being driven not by banks but by fintech firms. Old-fashioned “factoring” to turn invoices into cash was time-consuming, laden with paperwork and an expensive form of credit—the resort to which was sometimes seen as a sign of financial stress.


Fintech firms offer new technologies that make early payments possible at the click of a button. They can quickly set suppliers up on their platform. Banks’ early-payment programmes have also typically been reserved for the largest suppliers. But fintechs have made supply-chain finance available to the tiddlers, too.  The market was also ripe for innovation in other ways. Globalisation has made supply chains longer and more complex.

Issam Chleuh is the 31-year-old Malian cofounder and Managing Director of the Suguba, a West Africa-focused platform providing access to capacity building and access to financial services for entrepreneurs, start-ups and SMEs led by youth and women.