🌯Inclusive FinTech Knowledge Bites [Week #67]
How Twiga is transforms distribution, MTN is powering digital credit in Africa, and the infrastructure for MSMEs that banks can’t reach.
Hey,
I’m Hugo Pacheco, and this is The Barefoot Economist —a newsletter where, every week, I break down three essential stories on last-mile technology, emerging market innovation, and financial inclusion. Consider it your bite-sized takeaway to stay informed, sharp, insightful, and easy to digest.
This week on The Barefoot Economist:
💡 Twigga new Lean, Mean, Distribution Machine
🧱 MTN lay down Africa’s next digital credit builders
🔄 The Liquidity Loops: Credit That Flows With the Hustle
Enjoy your reading!
💡 Twigga new Lean, Mean, Distribution Machine
We’ve all been bitten by the siren call of vertical integration, owning every link in the chain, from seed to shelf. But as Twiga’s latest pivot shows, sometimes the smartest move is to let go of the anchors and dance with partners who already know the beat. Below, you’ll find the distilled wisdom from their asset-light transformation, reframed through a lens that celebrates agility, pragmatism, and the art of the blend.
Twiga Foods’ shift from owning the field to empowering the field marks a milestone in African B2B commerce. By acquiring but not assimilating three distributors, Twiga transforms fixed costs into variable agility, aligns itself with Kenya’s informal retail giants, and refocuses on data-driven decision-making. This playbook underscores a broader startup maturity: restraint over reach, partnerships over possession, and the unglamorous grind of operational excellence over headline-grabbing expansions.
🌯 The Barefoot Insight
Embrace Strategic Partnerships, Not Control FreakeryTwiga’s stake in Jumra, Sojpar, and Raisons is less a takeover and more a tech-powered alliance. By outsourcing bricks-and-mortar ops while embedding its software DNA, Twiga sidesteps capital drag and gains instant market muscle.
Scale Smarter, Not HarderEight new distribution hubs, zero new warehouses. This isn’t penny-pinching, it’s precision. Leveraging existing footprints across Central, Coast, and Western Kenya catapults reach without ballooning the balance sheet.
Lean Into the Informal MainstreamUrban supermarkets are sexy; dukas are profitable. Shifting focus to the sprawling, informal retail network taps into Kenya’s real heartbeat, where 70 percent of FMCG commerce still flows through mom-and-pop storefronts.
Marry Decentralized Ops with Centralized InsightTwiga centralizes its BI, route optimization, and procurement muscle, while letting local teams run daily show-and-tell. It’s the hybrid you’ve heard about: nimble on the ground, data-driven in the cloud.
Investor Caution Can Be CatalyticFunded by Juven and Creadev, no fresh rounds, this move screams disciplined reinvestment over splashy dilution. In today’s “prove-your-unit-economics” era, consolidation trumps expansion as the path to sustainable growth.
Looking forward, these lessons resonate directly with our upcoming panel at the Africa Jobtech Summit, “eCommerce in Africa is Social: The Role of Social Commerce & Agent Models.” We’ll dive into how hybrid networks much like Twiga’s harness local relationships, technology, and trust to unlock real impact.
🧱 MTN laying down Africa’s next wave of digital credit builders
Africa’s credit gap isn’t closing with banks alone. It’ll take distributed rails, like telco APIs, trust from prepaid users, and local agent networks that can do more than just cash in/out. MTN BankTech is not a fintech. It’s a credit operating system for underserved markets. But the full rollout hinges on one thing: Will regulators let infrastructure players become lenders?
Until then, Ghana scales. Nigeria waits. And the rest of the continent watches.
🌯 The Barefoot Insight
In Q1 2025, MTN disbursed $592 million in digital loans via BankTech. That’s not just a headline, it’s a roadmap for how telecoms are becoming Africa’s most important financial infrastructure.
Telcos are the new credit railsMTN’s BankTech isn’t a lending product. It’s a platform. Think of embedded credit as a service, offered via APIs to fintechs, merchants, and platforms. MTN is not just lending to end users; it’s embedding financial DNA into digital ecosystems.
Credit delivered where it’s needed most, at the edge of formal finance.
Growth by design, not chanceQ1 2024: $371.7M
Q2 2024: $359.9M
Q3 2024: $461.5M
Q4 2024: $546.8M
Q1 2025: $592M* [Also cited as $731.6M: pending clarity in MTN reports]
This isn’t spiky growth. This is strategic compounding, MTN learning how to price, distribute, and collect at scale. Key geographies: Ghana, Uganda, Cameroon. These markets aren’t accidents; they’re regulatory green zones.
Nigeria: The elephant in the (regulatory) roomMTN’s largest market by users is locked out of digital credit. Why? Its PSB license bars lending. So, MTN leans on Xtratime, its airtime lending proxy. Not cash, but credit-like. And it works, fintech revenue in Nigeria jumped 57.9% YoY. The message is clear:
In markets where regulation sleeps, innovation goes elsewhere.
This is BaaS with a Pan-African thesisMTN isn’t just building a product; it’s positioning as Africa’s BaaS backbone, a strategy similar to what Square or Ant Group did elsewhere. But here, the challenge isn’t product-market fit. It’s regulatory strategy and local execution.
Business Model Innovation Is the New Distribution AdvantageThe toughest aspect of lending is securing your funds back. Not scoring, not pricing but collection. And that’s where MTN’s partnership with JUMO changes the game. Instead of trying to scale credit by themselves (and chase 10,000 defaults across fragmented micro-borrowers), MTN outsourced the hardest part, risk calibration and last-mile orchestration, to JUMO. Why? Because JUMO doesn't just build scoring models. It builds business models.
This isn't about data. It’s about distribution through design. JUMO uses telco rails to plug credit scoring and disbursement logic directly into low-bandwidth environments via USSD. It turns a SIM card into a credit interface.
🧭 That’s the leap: From lending money to engineering trust.
For MTN, this means risk is shared, recovery is embedded, and the telco transforms from a pipe to a platform.
For JUMO, this unlocks scale without needing boots on the ground.
🔄 The Liquidity Loops: Credit That Flows With the Hustle
What Safaricom just launched isn’t just another mobile loan; it’s a deeply embedded, low-friction credit rail stitched directly into the cash infrastructure of informal Kenya. Fuliza Biashara and Taasi Till are not aimed at boardrooms or funded startups. They’re built for the mama mboga, the kiosk owner, and the thousands of till-based micro-merchants who move cash faster than banks can keep up with.
Here’s what’s different: this isn’t just credit offered, it’s credit absorbed into the rhythms of small business cash flow. No apps to download. No forms to fill. Just liquidity, on demand, inside a channel merchants already live and breathe through: M-Pesa tills.
This is a systems-level play, a liquidity layer over Kenya’s most critical infrastructure: informal trade.
🌯 The Barefoot Insight
Embedded Liquidity as InfrastructureMerchants can now tap KSh 1,000 to 400,000 in real-time overdrafts (Fuliza Biashara), repaid directly from future sales on their till. Credit no longer lives in separate apps. It’s part of the sales loop, money in, partial repayment out. Invisible. Frictionless.
Short-Term Term Loans with Clear PricingTaasi Till offers KSh 1,500 to 250,000 in 7, 14, or 30-day business loans with flat fees (no compounding interest): 3.85% (7 days), 4.71% (14 days), 6.41% (30 days). Whether a merchant repays on Day 1 or Day 30, the total fee stays the same. Simple. Predictable. Trust-building.
Signal, Not Just Service: Six-Month Merchant Activity RequiredTo qualify, you need six months of till or Pochi activity. That’s a proxy for merchant consistency, a quiet underwriting algorithm hiding in plain sight.
Credit That Moves at the Speed of HustleRepayments happen when cash comes in, no penalties for dry days. For MSMEs with volatile cash cycles, this is closer to real working capital than anything banks currently offer.
Power in Partnership: KCB, Sidian, Pezesha, DTBSafaricom isn’t going it alone. By anchoring this on partnerships with regulated lenders and fintechs, it de-risks the credit layer while leveraging the reach of M-Pesa.
Why This Matters at ScaleMSMEs contribute ~30% of GDP and over 80% of employment in Kenya (KNBS, 2023). But a $19 billion credit gap (IFC, 2022) has kept them locked out.
This product stack could absorb billions in informal liquidity, giving merchants the shock absorbers they need to scale.
Merchant by Day, Agent by Design: The Overlooked Dual UtilityMany Lipa na M-Pesa merchants are also cash-in/cash-out agents, this credit rail doesn’t just fuel sales, it strengthens Kenya’s last-mile liquidity grid. By stabilizing merchant cash flow, Fuliza Biashara quietly reinforces agent float capacity, creating a dual-function node in the informal financial system: Sell product and serve the network. This is agent infrastructure without calling it that, a decentralised way to shore up rebalancing without new branches or float managers.
This is how you build resilient financial systems in cash-heavy, trust-constrained markets: leverage the actor already in the middle of everything.
See you next week,
Hugo Pacheco