Africa has emerged as the global centre of mobile money, with more than US$1trn in transactions processed on the continent in the past year, around volumes. This development does not reflect superior fintech innovation, but rather a structural gap: traditional banking infrastructure was never built a telecom operators to fill the void. The story is usually framed as a payments story – transaction volumes, financial inclusion milestones, the emergence of telco-led wallets.

However, it Telecoms operators have evolved into de facto financial infrastructure providers, leveraging extensive mobile penetration and distribution networks w bank branch networks. The gap (opportunity?) left by the banks To understand why telcos could become so integral to everyday life in Africa, start with what the banks did not build.

The IMF’s Financial Access Surve shows that across Sub-Saharan Africa (SSA), banking infrastructure remains limited, averaging c. six branches per 100,000 adults. Nigeria, which has at c. 4.4 branches, with Kenya, one of Africa’s more developed financial markets, at the same level.

Compare that to the US at 138 branches per 100,00 not low because it is following a digital trajectory without the need for physical infrastructure, but rather because the branch network was never built t What the numbers obscure is geography. Most branches are concentrated in urban centres: the Bank of Tanzania’s own data show more than half of clustered in cities. Rural populations were not just underserved; they were excluded.

Mobile network coverage, in contrast, exceeds 90% of Africa’s pop well beyond urban areas. The architecture of the solution This disparity enabled telecom-led solutions such as Safaricom’s M-Pesa, launched in Kenya in 2007, which utilised unstructured supplementary serv deliver low-cost, accessible financial services via basic mobile devices.

A user dials a short code like *123# on any phone, a live text-menu session op follows the prompts, enters a PIN, and the transaction is done in 30 seconds. USSD technology does not require the latest smartphone, internet, or banking app. All it requires is a SIM card and a GSM signal (primarily 2G and 3G simplest form of mobile technology. It works on every GSM handset ever manufactured and costs the user nothing in data charges.

In the West Africa Union (WAEMU; a regional organisation of eight nations—Benin, Burkina Faso, Côte d’Ivoire, Guinea-Bissau, Mali, Niger, Senegal, and Togo), 89% of m run over USSD. Across Africa, it is closer to 64%. Given that this technology stack meets the demand, there is very little reason to upgrade. The Safaricom model has since scaled across the continent. For example, MTN Group’s MoMo operates across 19 African markets with c. 70mn mon processing US$500bn in transactions in 2025.

Airtel Africa’s Money serves 44mn users across 14 countries, supported by an agent network that has i 2025 alone. Together, these operators have built a continental payments network through a common architecture: USSD on the front end, agents as th infrastructure as the payment rails.

Deny The constraint and what unlocks it

Unfortunately, the current model is constrained by technology. While USSD is universally available and enables payments and basic services, it limits  ANCHOR functionality. In a single session, a user can send money, pay a bill, or check a balance, but that is where the financial offering ends. There is, for exam generate a loan offer or process a merchant QR code. The financial service is constrained by what the underlying technology can process.

Around 64% of Africa’s population lives within mobile coverage but does not use mobile internet, the highest of any region globally, according to the G

Communications Association (GSMA) Intelligence. Asia Pacific’s usage gap is 43%, and Latin America’s is 31%. Africa accounts for 33% of the world’s despite near-universal coverage. The barrier is not network coverage, but device affordability and the usage gap. Figure 1: Mobile internet connectivity by region, % of population

Source: GSMA Intelligence, June 2025, Anchor Capital Across all African connections in 2024, 4G already leads at around 45%, and the network has largely been upgraded. However, USSD persists not beca networks, but because most devices are still basic feature phones or low-end smartphones for which data costs money and apps require storage.

GSMA Mobile Economy 2026 puts smartphone ownership in Africa at just 24% of the population, also the lowest of any region globally. A 4G-capable 26% of monthly GDP per capita, vs 16% across other low and middle-income countries. Figure 2: Mobile technology mix by region, % of total connections

Source: GSMA Intelligence, June 2025, Anchor Capital The forward picture is one of a relatively slower adoption. By 2030, GSMA forecasts Africa at 21% 5G penetration (in the last position globally), vs 89% Europe, and 88% in China. Although the trajectory is positive, the pace of change lags the rest of the world. Addressing this constraint represents the next phase of growth. Industry initiatives aimed at lowering the cost of entry-level smartphones are expected digital financial services.

In October 2025, the GSMA (working with Airtel, Axian Telecom, Ethio Telecom, MTN, Orange, and Vodacom) introduced min affordable entry-level 4G smartphones. The goal is simple: make a device that unlocks the next layer of financial services affordable at scale. When th gap becomes an addressable market. The investment angle From an investment perspective, African telecom operators have evolved beyond just connectivity providers.

Fintech revenues are growing rapidly, wit from higher-margin financial services. For example, MTN MoMo’s fintech revenue grew 23% YoY to R29bn in 2025, with advanced services (such as c payments) growing at 40% YoY to over R8bn. The mix shift from transfer fee revenue to financial services revenue is already underway.

Another angle that we have discussed at length is Optasia, which was listed on the JSE in November 2025 and is an AI-powered fintech company whi directly with mobile operators, including MTN and Vodacom, to deliver AI-driven microcredit through existing mobile infrastructure. It processes over 3 with an average ticket size of US$5. The revenue mix tells a similar story to MTN’s: in 2019, virtually all revenue came from airtime credit extensions; b microfinancing.

Revenue grew 76% YoY in 2025 to US$265mn, well ahead of the company’s guidance. The rails are built, and the distribution networks (agent networks) are already in place. The question is how value creation evolves as device accessibi more sophisticated services are layered onto existing platforms, and who owns the infrastructure when it does.