Finance for the 90%: Are we finally ready to Bank the Unbanked?

Tuesday 28th October 2025.

If 90% of Africa’s businesses remain inadequately financed, then Africa remains largely unbanked.

SMEs account for over 90% of businesses in Africa and generate nearly 80% of jobs across the continent (African Union Commission, 2024). Yet they face a $330 billion financing gap (AfDB, 2024). This isn’t a funding problem. It’s a system failure.

Africa has the highest entrepreneurship rate globally—one in five working-age Africans is starting a business (Brookings, 2024). By 2050, we will have 850 million young people, constituting of half of the continent’s working-age population (UN DESA, 2024).

Women own 40% of SMEs but receive less than 20% of financing (World Bank, 2023). Only a small fraction can access the capital to grow and are intrinsically excluded from economic participation. These structural setbacks in African economies need to change.

Compounded to this structural setback for women, is the fact that 62% of African SMEs experience cash flow disruption due to delayed payments from large clients (World Bank, 2024). Payment cycles stretch from 30 to 120 days. In finance, cash flow is synonymous with oxygen. For Africa’s emerging enterprises, delayed payments are suffocation. The same institutions that celebrate entrepreneurial agility are the same institutions inadvertently suffocating it.

The entrepreneurial energy in African SMEs is unmatched globally. So, what’s the revolutionary playbook? Here are some suggestions for consideration: (i) governments can consider designing creative tax incentives for startups; (ii) mandate shorter payment terms for SME contracts to enhance their cash flow; (iii)  more financiers must deploy capital intermediaries to bridge global capital with local SMEs to help de-risking investments, redefine collateral, shift from rigid fixed-asset requirements and include other considerations such as receipts from future contracts, etc.. More financiers must use blended finance, strategically deploying dormant public capital (e.g., pension funds) to unlock private investments and provide financial support to SMEs. Through increased access to finance for SMEs, growth will change from being a buzzword to becoming a breakthrough.

This article is based on dialogue with Dr. Patricia Laverley, Country Representative at the African Development Bank Group in Tanzania on how to increase access to finance for African SMEs.