By Kenneth Oboh

In recent years, African countries have increasingly become a focal point for fintech service development. Amidst growing interest in the African fintech market, Mikhail Shebalkov, a recognized expert in the fintech industry — whose background includes leading the fintech division at Yandex as Head of Fintech for global markets, as well as heading the digital sales and services division at Uralsib Bank as Head of Digital Sales and Services Department — shares his experience in financial technology. He discusses how he developed fintech projects in Africa, creating payment solutions for Yango in Ghana and Côte d’Ivoire. Mikhail explains how to adapt products to local conditions, considering low banking penetration, the widespread use of mobile payments, and the region’s cultural specifics. He also shares practical advice on building relationships with partners and regulators, managing risks, and utilizing analytics. Finally, Mikhail provides an expert forecast on how Africa’s rapidly growing fintech market will evolve over the next five years.

Mikhail, your experience is truly impressive. You not only managed risks for large credit portfolios at Alfa-Bank, a leader in Russia by asset size, but also headed the digital sales and services division at Uralsib Bank as Head of Digital Sales and Services Department, and led the fintech division at Yandex as Head of Fintech. What motivated you to apply your experience and knowledge specifically to developing fintech projects in Africa?

Africa is one of the most promising regions for fintech development. It simultaneously exhibits high digital penetration (especially mobile phones) and low levels of banking access. In some countries, over 60% of the adult population doesn’t have a bank account, yet they actively use mobile payments. Nearly 900 million mobile money accounts and over $900 billion in transactions in 2023 represent two-thirds of the global mobile financial transactions market. Meanwhile, in 2023, only 104 million Americans aged 14 and older used mobile payment apps in stores.

Unlike developed markets where digital wallets rely on established banking infrastructure, the African ecosystem is built on solutions managed by telecommunications companies. Nevertheless, transaction volume continues to grow by double digits annually. Product development strategies focus on achieving interoperability between fragmented markets — a stark contrast to the standardized systems in Europe or America. This creates enormous opportunities for new financial services.

I encountered these challenges while creating fintech services for Yango in countries like Ghana and Côte d’Ivoire. We developed solutions that helped millions of users make digital payments using familiar tools. My experience in building scalable financial platforms and a deep understanding of data-driven culture helped me see the potential of this market and possible paths for its development.

You mentioned the specifics of the African market. Given your experience working in different regions, what unique characteristics of this market would you highlight compared to others?

The African market differs significantly from European or Asian markets, not just in terms of regulation, but also in consumer habits. Instead of bank cards, mobile money (like M-Pesa, MTN Mobile Money) is actively used here, and lending is based on alternative data — behavioral patterns, mobile activity, and transactions—due to low credit history penetration. Cultural specifics require tailored marketing, and developed agent networks for mobile wallets, while having parallels in Asia, are not found in Europe or the US. This unique combination of factors forms a distinct ecosystem where innovative solutions are adapted to local realities.

For example, Ghana’s Farmerline integrates mobile wallets with agricultural commodity price information and financing for 1.2 million farmers. In Tanzania, Tigo Pesa partners with PharmAccess, enabling payment of insurance premiums via mobile wallets for 840,000 insured individuals. And Nigeria’s Flutterwave, with its Barter app, facilitates cross-border trade, allowing entrepreneurs to pay suppliers in Kenya and Ghana, bypassing currency restrictions. These examples show how fintech companies in Africa aren’t just copying Western models but are creating innovative solutions that meet specific market needs and leverage its unique characteristics.

You’ve established yourself as an expert capable of successfully leading complex and innovative projects. Could you tell us more about how you adapted your product to local specifics?

Adapting the product to the African market primarily required a mobile-first approach. Given that most users access the internet via smartphones, often with poor connectivity, we optimized applications for low-speed internet, simplified the interface, and minimized the use of heavy graphics. Instead of bank cards, we integrated with popular mobile money services like MTN and Airtel and developed user-friendly KYC and verification processes adapted to local conditions.

Success in the fragmented African market demands deep local adaptation. A prime example is MTN Mobile Money, which supports 14 regional dialects in Cameroon, or Safaricom’s M-Pesa with Swahili voice prompts. Integration with local services—like utility or education payments, as Airtel Money did with Kenya Power — significantly increases user loyalty. And offline functionality, implemented in Orange Money via SMS transactions, becomes critical in areas with unstable internet.

Interoperability remains a challenge. While in some countries, M-Pesa and Airtel Money cover 80% of users, in others, the lack of unified standards forces businesses to work with multiple wallets simultaneously. Fintech companies like OPay are solving this problem by developing their own payment aggregators, simplifying interactions between different mobile money services.

You mentioned the need for technical adaptation. What were the main challenges in launching the project from a business process perspective? How were they overcome?

One of the key barriers was the regulatory environment. Fintech in Africa is relatively new, and legislation varies significantly from country to country. Obtaining necessary licenses, complying with KYC/AML requirements, and constantly engaging with local regulators demanded substantial resources and a deep understanding of local laws. We addressed this through strategic partnerships with already licensed banks and fintech providers who had the necessary experience and connections with regulators. This allowed us to focus on product development and market adaptation while minimizing regulatory risks.

The second significant challenge was cultural differences in conducting business. In Africa, personal relationships and trust play a much larger role than in Europe or the US. Project success often depended not just on product quality but also on strong ties with partners and clients. This required considerable effort from us to build long-term relationships, participate in local events, and demonstrate our commitment to developing the African market.

Finally, technical limitations, such as varying connectivity quality across regions, uneven smartphone penetration, and limited payment infrastructure, forced us to seek non-standard technical solutions. We invested in developing lightweight applications optimized for low-speed internet and integrated with various payment systems to ensure maximum accessibility of our services for users.

Continuing the topic of project management in complex environments — how did you build relationships with local partners and regulators?

Building relationships with local partners and regulators in Africa is a process that requires time, patience, and a deep cultural understanding. Unlike more formalized markets, personal contacts and trust are key here. We paid close attention to establishing personal connections, held numerous meetings, participated in industry conferences, and actively interacted with government representatives. Working with local consultants proved extremely helpful; they guided us through the nuances of the local market and business culture.

Beyond personal contacts, it’s crucial to demonstrate long-term intentions and a willingness to invest in the local market’s development. We actively invested in training our teams, adapting global practices to local conditions. This approach helped us gain the trust of partners and regulators, showcasing our commitment to long-term collaboration and contribution to the African fintech ecosystem’s development.

Mikhail, you have extensive experience working with data in large financial organizations. Could you tell us what role analytics plays in developing fintech projects in Africa?

Analytics plays a unique role in African fintech, addressing three key tasks. First, alternative scoring. The lack of credit histories for 65% of the population necessitates using alternative data and machine learning to assess creditworthiness. By analyzing non-traditional data like device metadata (app usage patterns, battery level), mobile activity, and in-app behavior, fintech companies like Nigeria’s FairMoney achieve impressive results, reaching a 92% loan repayment rate.

Second, analytics is critical for optimizing marketing and personalizing offers. Predictive analysis based on user behavior data allows for targeted offers, increasing conversion rates and customer acquisition efficiency. Examples like MTN Ghana’s churn prediction (reducing churn by 14%) demonstrate the effectiveness of such approaches. And finally, analytics is indispensable in combating fraud, which becomes particularly relevant in a rapidly growing market. Graph algorithms, as used by Cellulant in Kenya (reducing losses by $7.8 million annually), help detect complex fraud schemes and minimize losses.

And how do you build a risk management system under these conditions?

The strategy can be based on using alternative data for creditworthiness assessment. Since traditional credit histories are often unavailable, scoring models in African markets are built by analyzing behavioral patterns, mobile activity, geolocation, social media data, and other non-traditional sources. This allows for creating a customer profile and assessing their ability to pay even without a formal credit history.

Next, apply the principle of tiered checks. Basic verification methods are used initially, and as the client’s activity and transaction amounts increase, additional checks are implemented. This minimizes risks without creating excessive barriers for new users. And finally, a flexible limit system. Instead of fixed restrictions, transaction limits can change dynamically based on user behavior, payment discipline, and the results of conducted checks. This approach helps strike a balance between stimulating user activity and effectively managing risks in conditions of high uncertainty.

Based on your international expertise, could you highlight the key competencies a team needs to succeed in the African market?

To succeed in the African market, a team needs three key competencies. First, deep local expertise. It’s impossible to effectively develop a business without a team that understands cultural nuances, market specifics, and the needs of local users. Second, flexibility and adaptability are critically important. The market changes dynamically, and solutions that worked yesterday might be ineffective today.

The team must be prepared for constant change and able to adapt quickly to new realities. And finally, a deep knowledge of regulatory requirements is necessary. Legal nuances often become a key barrier to market entry and can significantly slow down project development.

Looking ahead — how do you assess the prospects for fintech development in Africa over the next 5 years?

I view the prospects for fintech development in Africa over the next 5 years extremely positively. The combination of demographic shifts, rapid mobile penetration growth, regulatory innovation, and technological leapfrogging creates unique opportunities for financial services development. Further growth in digital payments is expected, driven by lower market entry barriers and the emergence of new, more accessible solutions.

The digitalization of small businesses is another promising area that could significantly impact the region’s economy. The adoption of cryptocurrencies and stablecoins is also expected, especially for cross-border payments, where they can offer more efficient and cheaper solutions. At the same time, market growth will inevitably lead to increased government regulation and standardization of fintech, creating a more transparent and secure environment for innovation. Overall, the next 5 years promise to be a period of active growth and transformation for Africa’s financial sector.

Mikhail, you’ve executed a truly unique project. To conclude our conversation — what are the main lessons from your experience that could be useful to other entrepreneurs? What would you recommend to those just planning to develop fintech projects in Africa?

My experience working in Africa showed that personal networking plays an even more critical role here than in other regions. Without strong, trusting relationships with local partners, regulators, and key market players, developing a business is extremely difficult. Therefore, investing in meetings, participating in local events, and building personal connections is not just desirable but absolutely essential. The second important lesson is that mobile technology is the key growth driver in Africa. Solutions need to be developed mobile-first, considering the specifics of the local market and internet bandwidth limitations.

And finally, legal preparation accounts for 50% of success. Licensing issues, regulatory requirements, and legal nuances can become serious obstacles to project development. Therefore, it’s necessary to work out a regulatory strategy in advance, consult with lawyers specializing in the African market, and build relationships with local regulators.

Overall, success in Africa requires a comprehensive approach that considers both the technological and cultural specifics of this unique market. Start by building long-term partnerships, think through your regulatory strategy early on, and focus on mobile solutions integrated with popular mobile wallet services.