Industry overview
Microfinance institutions (MFIs) target customer segments underserved by traditional financial institutions, such as low-income households, smallholder farmers, and micro, small, and medium-sized enterprises (MSMEs). MFIs offer tailored financial services to these groups, primarily generating revenues from interest on small-scale loans, origination and repayment fees, and digital financial services like payments and remittances. Their growth has been driven by significant financial inclusion gaps: Based on the 2021 Global Findex Database, just 55% of Sub-Saharan African (SSA) adults had a formal financial or mobile money account. Meanwhile, the International Finance Corporation (IFC) estimates the region’s MSME finance gap at $325 billion in 2025, and as high as 30% of GDP in Nigeria and 21% in Kenya. Rapid mobile penetration and enabling regulatory frameworks have further fuelled growth in the microfinance industry in East and West Africa. Despite strong growth, traditional banks and fintech companies increasingly threaten the microfinance sector. Banks are moving
