African fintech and the case for building to the constraint

Analysis

The lesson from Africa's most durable fintech companies is plain: build for the phone and the wallet people already have, not the ones a richer market imagines.

That idea — design to the constraint, not the fantasy — runs through a recent reading of the continent's payments market, and it lands squarely on Zambia. Here, money already moves over USSD codes on basic handsets and through agent kiosks, not glossy apps on premium phones. Kwacha News examined one such shift in its explainer on why Zambia is retiring the cheque.

Start with the device. Research on the continent's messaging habits shows WhatsApp reaches roughly 97% of connected users in Kenya, 96% in South Africa and 95% in Nigeria — penetration a bank can only envy. The fintechs that grow fastest meet customers there and on the plain USSD menus that work without data, rather than waiting for everyone to download a banking app. The upshot: distribution beats design when the design assumes a phone most people do not own.

The numbers under the hood show how far a constraint-first model can scale. Optasia, a micro-lending platform, distributes about $30 million a day across some 32 million loan transactions, at an average of 40 cents a loan and a default rate near 1.2%, approving a borrower in around 30 seconds. Those are not the unit economics of a glossy app chasing affluent users; they are the economics of tiny loans, at vast volume, priced for thin margins. What this means: profitability on the continent often lives in the small-ticket, high-frequency business that richer markets overlook.

Others make the same bet in different corners. Clickatell routes banking through USSD and WhatsApp; Nile runs commerce over WhatsApp across several markets; MyPinPad turns ordinary smartphones into payment terminals; Bank Zero built a mutual-bank model from scratch; Lesaka Technologies leans into cash rather than pretending it has vanished. Cash, after all, still carries roughly 44% of value flow in one of the continent's more mature payment markets. The read here: the winners treat cash and the basic phone as the terrain, not as a problem to be wished away.

Build for the device people already own, not the one that you wish they owned.

— Michael Jordaan, co-founder of Bank Zero, on designing for the African market

Zambia fits the pattern. Mobile money — Airtel Money, MTN MoMo, Zamtel's Kwacha service — runs on the same USSD rails, reaching people far from a bank branch through a network of agents. The Bank of Zambia has pushed interoperability so value can move between wallets and banks, and the cheque is on its way out. A fintech that designs for a Lusaka market trader with a feature phone and a data-light bundle is building for the actual customer; one that designs for a salaried Johannesburg professional with an iPhone is building for someone Zambia has far fewer of.

Background

Mobile money reshaped African finance because it solved a distribution problem, not a technology one. Bank branches are scarce and expensive to run; mobile-phone agents are cheap and everywhere. By turning airtime kiosks into cash-in, cash-out points and using USSD menus that work on any handset, operators reached tens of millions who had never held a bank account.

Zambia's market sits inside that story. Mobile-money accounts now far outnumber traditional bank accounts, and agents extend financial services into rural districts the formal banks never reached. The Bank of Zambia's work on a national payments switch and wallet-to-bank interoperability aims to knit these rails together so money moves cleanly across providers. Kwacha News has reported on the next layer of connectivity in its coverage of MTN Zambia's Starlink direct-to-cell plans.

The constraint-first lesson is not an argument against ambition; it is an argument about sequencing. Build the rails that work on today's phones, earn the volume, and let richer products follow the customers up the income ladder — rather than launching a premium app for a market that has not arrived yet.

What to watch

The first marker is interoperability. Analysis of payment markets shows that value trapped inside a single wallet limits growth; data on Zambia's switch reveals the gains come when money moves freely between providers and banks. Evidence from other markets demonstrates that open rails, not closed apps, drive scale.

The second marker is credit. Optasia's numbers show small-ticket lending at volume can work; the question for Zambia is whether local lenders can price tiny loans at low default without tipping into the over-indebtedness that has dogged consumer credit elsewhere. This piece is part of Kwacha News's continuing technology coverage of the digital economy.

Frequently Asked Questions

These are the questions readers have raised about the build-for-the-constraint argument and what it means for Zambia. Short answers follow, drawn from the analysis of African fintech and the shape of Zambia's mobile-money market.

What does "build for the constraint" mean?

In short, it means designing financial products for the basic phones, thin data and cash habits people actually have. The answer, simply put, is to meet customers on USSD and messaging rather than premium apps. The key is that distribution, not polish, decides which African fintechs scale.

How big can constraint-first lending get?

Research on the lender Optasia shows it distributes about $30 million a day across roughly 32 million loan transactions, averaging 40 cents a loan at a default rate near 1.2%. Data reveals approvals in about 30 seconds. In other words, very small loans at very large volume can be a real business.

Why does this matter for Zambia?

According to the pattern, Zambia's money already moves over USSD through Airtel Money, MTN MoMo and Zamtel Kwacha, reaching people far from a bank branch. Evidence shows mobile-money accounts outnumber bank accounts. The answer is that the constraint-first model describes Zambia's market directly.

Is cash going away?

Not soon. Data shows cash still carries roughly 44% of value flow in one of the continent's more mature payment markets. The key is that successful operators treat cash as terrain to build on, not a problem to ignore. Simply put, the winners design for cash and digital together.

What is the role of the Bank of Zambia?

The Bank of Zambia has pushed interoperability and a national payments switch so value moves between wallets and banks. Analysis shows open rails drive scale. In other words, the regulator's job is to connect the providers so the constraint-first products built on top can reach everyone.

Sources

The African fintech argument and its figures — WhatsApp penetration, Optasia's lending volumes, the cash share of value, and the Bank Zero quote from co-founder Michael Jordaan — are drawn from Daily Maverick's analysis of African fintech. The Zambian mobile-money and interoperability context is via the Bank of Zambia.