Africa has made striking progress in bringing millions of people into the formal financial system. The harder task now is making sure that access to finance actually improves livelihoods.
That challenge is becoming increasingly important for the continent’s small businesses, particularly those run by women and young entrepreneurs. Bank accounts and mobile wallets have spread rapidly, but affordable credit — the kind that can help a trader buy more stock, a farmer invest in equipment or a small company hire another worker — remains much harder to secure.
World Bank data shows how far the continent has come. In 2024, 58% of adults in Sub-Saharan Africa had a financial account, up from 49% in 2021. Formal saving also increased, reaching 35% of adults.
Those numbers tell an encouraging story about financial inclusion. They do not, however, tell the whole story.
For millions of Africans, being connected to the financial system still does not mean being able to borrow on reasonable terms. Small businesses frequently struggle with collateral requirements, limited credit histories and financial infrastructure that remains concentrated in larger towns and cities. Women and younger entrepreneurs often face additional barriers.
That is why microfinance is entering a different phase in Africa.
The original promise was relatively straightforward: give people excluded by conventional banks access to small loans and allow them to build businesses and improve household incomes. The experience of recent decades has shown that finance can help, but credit alone is rarely enough.
Benin illustrates both the scale of the problem and the direction policymakers are taking.
When the World Bank approved a $100 million programme targeting women entrepreneurs in January 2026, just 3.9% of women-managed businesses in the country were reported to have access to bank loans.
The programme aims to reach more than 10,000 women-led micro, small and medium-sized enterprises. Crucially, the intervention goes beyond lending. Financing is being combined with training, mentoring and business-development support.
Somalia offers another example from a very different economic environment.
By March 2026, more than 1,800 women micro-entrepreneurs had received credit through financial institutions supported by Gargaara, Somalia’s wholesale financing facility. Women-owned micro, small and medium-sized enterprises accounted for 47% of loans under the programme, exceeding the requirement that participating institutions direct at least 40% of lending towards them.
For Somalia, where decades of conflict have weakened formal institutions while private enterprise has remained central to everyday economic life, widening access to finance has significance beyond individual businesses. It can help connect entrepreneurs operating largely outside conventional banking with a more structured financial system.
But Africa’s microfinance debate cannot simply be about issuing more loans.
Poorly designed credit can leave vulnerable borrowers carrying debt they cannot sustainably repay. Weak consumer protection, aggressive lending and multiple borrowing can turn an instrument intended to expand opportunity into another source of financial pressure.
That is particularly important as lenders become increasingly digital.
Mobile money has already transformed the way millions of Africans send, receive and store money. The next contest is over whether the same digital infrastructure can expand responsible access to savings, insurance and business finance.
In September 2026, the African Development Bank and AXIAN announced an initiative targeting more than 34,000 women-led enterprises through digital financial-services platforms. The programme is aimed at a much larger structural problem: an estimated $49 billion financing gap facing women entrepreneurs across Africa.
Digital lending could help narrow that gap because it can reach customers at a scale and cost that traditional branch-based banking often cannot. Transaction histories and other financial data may also give lenders new ways of assessing entrepreneurs who lack conventional collateral or lengthy banking records.
Yet technology does not remove the fundamental risks of lending. It can accelerate them.
When credit can be obtained through a phone in minutes, questions around affordability, transparency, data use and consumer protection become even more important. Africa’s financial inclusion drive therefore needs to measure success by more than the number of accounts opened or loans disbursed.
The more important question is what borrowers are able to do with that access.
Can a market trader obtain working capital without sacrificing most of her profits to repayments? Can a young entrepreneur build enough of a financial record to graduate from a microloan to larger business financing? Can a rural enterprise access the same financial tools increasingly available in major African cities?
Those questions matter because Africa’s small businesses are not a marginal part of its economic story. They support millions of households, provide employment and keep local economies functioning across a continent where formal salaried jobs remain insufficient for a rapidly growing working-age population.
Closing the financing gap could therefore have effects well beyond individual entrepreneurs. More productive small businesses can mean stronger household incomes, greater local investment and potentially more jobs.
That also connects financial inclusion to the African Union’s wider ambitions under Agenda 2063: building more inclusive economies while expanding opportunities for women and young Africans.
The lesson emerging from Benin, Somalia and the continent’s expanding digital-finance sector is that the future of microfinance will not be decided simply by how many Africans can borrow.
It will depend on whether Africa can build financial systems that help people save, invest and grow businesses without pushing vulnerable borrowers into unsustainable debt.
The continent has made considerable progress in opening the door to formal finance. The next test is whether walking through that door leads to genuine economic opportunity.
