Kuda Boss Says Incentives Alone Won’t Win Over Africa’s Next Billion Fintech Users

African fintechs hoping to sign up the continent’s next billion users will need to rethink the industry’s long-running growth playbook, according to Musty Mustapha, Managing Director of Kuda Microfinance Bank, who says cashbacks and incentives may drive downloads but rarely help build sustainable businesses.

Speaking at a fintech panel discussion on scaling digital financial services across Africa at Tech Revolution Africa, a gathering of tech leaders, investors, operators, and professionals which was held recently at Landmark Event Center, Mustapha objected to what he described as the “growth at all costs” culture which has defined much of African fintech so far.

While incentives can quickly inflate user numbers, he said they often fail to create the kind of trust and consistent usage that keeps customers long term.

“It is easy to buy users,” he said. “But if you grow without creating real value, you’re only solving for today’s numbers and ignoring whether the business survives tomorrow.”

His comments come at a time when many startups are under pressure to demonstrate stronger unit economics as venture funding tightens and investors shift attention from rapid acquisition to profitability and retention. In that environment, Mustapha argues that reliability, not marketing spend, will determine which fintechs endure.

Contrary to common assumptions, he said African consumers are not resistant to technology but cautious, shaped by years of unreliable services and weak infrastructure. Products that work seamlessly elsewhere often struggle locally because they fail to account for that trust deficit.

“They’re not digitally naïve,” he said. “They’ve just operated in low-trust environments. If something fails even once or twice, you lose them.”

That focus on trust has influenced how Kuda Microfinance Bank has approached its growth. Launched in 2019 as a digital-first bank, it expanded from roughly 100,000 customers within its first year to nearly 300,000 the next, before surging past 2 million customers in 2021. Today, the microfinance bank serves more than 7 million Nigerians, Mustapha said, describing the journey as less predictable than the numbers suggest.

“The reality is, you can’t forecast scale neatly,” he said. “You can wake up and suddenly have a huge spike in users. If your systems and people aren’t ready, you crumble.”

In his view, the strain on a fintech typically shows up first behind the scenes, not on its app. As volume increases, back-office functions such as reconciliation, chargebacks and customer support can quickly become chokepoints, eroding the trust that fintechs are trying to build. Founders, he said, often underestimate these operational demands in the early days while prioritising product development.

“Anything you don’t pay attention to in your first six months will come back to hurt you at scale,” he said.

External constraints add more complexity. Payment rails, power supply, and connectivity remain outside the control of most fintechs, making outages and delays inevitable. Rather than trying to outspend those limitations, Mustapha said companies must design around them by building redundancies and multiple pathways for critical services.

“You don’t assume perfection,” he said. “If one channel fails, there must be another. That’s how you stay reliable.”

As traditional banks, telcos, and startups increasingly compete for the same mass-market customers, Mustapha expects the winners to combine the strengths of each group — the capital base of banks, the distribution reach of telcos, and the speed of fintechs. But regardless of the model that dominates, he believes the fundamentals will remain the same.

For millions of first-time or underserved users, the deciding factor is simple: whether the service works every time.

“There’s this idea that the average customer can’t use sophisticated products,” he said. “That’s not the issue. What they want is something they can trust.”

As fintech chases its next phase of growth, trust, rather than incentives, may prove to be the sector’s most valuable currency.