Leapfrogging in the Financial Sector

The research paper examines the 'fintech revolution' in Africa, focusing on how mobile money services like M-Pesa have allowed the continent to bypass traditional banking infrastructure. It details the economic impacts of digital finance, including poverty reduction and GDP growth in sub-Saharan Africa, while noting remaining challenges in cross-border payments and regulatory oversight.

• Mobile money has enabled significant technological leapfrogging in Africa, allowing users to access financial services without traditional bank branches. M-Pesa, launched in Kenya in 2007, is a primary example; by 2025, it processed approximately 37 billion transactions, representing nearly a sixfold increase since 2017.
• Sub-Saharan Africa leads the world in mobile money adoption, with over one billion registered accounts and more than 280 million monthly active users. The region's annual mobile money transaction value exceeded US$1 trillion in 2025.
• Digital financial services have contributed to economic growth and poverty reduction. In sub-Saharan Africa, the contribution of mobile money to GDP rose from approximately US$150 billion in 2022 to US$190 billion in 2023. In Kenya, M-Pesa access lifted 2% of households (194,000) out of poverty, with particularly strong effects for female-headed households moving from agriculture into business.
• Fintech has expanded beyond basic finance into utility payments and energy. Pay-as-you-go solar energy systems use mobile payments to provide electricity to low-income homes, and cities like Kampala use integrated mobile systems to improve service delivery for water, sanitation, and electricity.
• Despite domestic success, cross-border payments in Africa remain slow and expensive. Potential solutions include interoperable digital payment systems or central bank digital currencies, which could be implemented as part of the African Continental Free Trade Area (AfCFTA).
• Digital finance has influenced governance and political transparency. Tools like Public Expenditure Tracking Surveys (PETS) have identified spending leakages in Ghana, Tanzania, and Uganda, while SMS-based systems in Ghana have been used by civil society to monitor elections.

APA

Yeboua, K. (2026). Leapfrogging in the Financial Sector. Institute for Security Studies. https://futures.issafrica.org/thematic/guide.pdf?thematic=09-leapfrog&topic=04-leapfrogging-financial-sector

Chicago

Yeboua, Kouassi. Leapfrogging in the Financial Sector. Institute for Security Studies, 2026. https://futures.issafrica.org/thematic/guide.pdf?thematic=09-leapfrog&topic=04-leapfrogging-financial-sector.

Wikipedia

{{cite report |last1=Yeboua |first1=Kouassi |title=Leapfrogging in the Financial Sector |publisher=Institute for Security Studies |date=25 May 2026 |url=https://futures.issafrica.org/thematic/guide.pdf?thematic=09-leapfrog&topic=04-leapfrogging-financial-sector |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{yeboua2026leapfrogging, author = {Yeboua, Kouassi}, title = {{Leapfrogging in the Financial Sector}}, institution = {Institute for Security Studies}, year = {2026}, month = may, url = {https://futures.issafrica.org/thematic/guide.pdf?thematic=09-leapfrog&topic=04-leapfrogging-financial-sector}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }