New Wave of Embedded Financial Services Set to Reshape African Business Landscape

Renew Capital, a venture firm focused on emerging markets, announced the selection of 15 companies from over 500 applicants across 48 African countries for its inaugural Renew Venture Lab: EmFi Series. This cohort represents a new approach to addressing Africa’s significant SME financing gap—one that may bypass traditional financial institutions.

The Untapped Potential in Embedded Finance

The sheer volume of applications underscores the growing interest in embedded finance solutions across the continent. Rather than relying on banks, many entrepreneurs are seeking ways to integrate financial services directly into existing digital platforms used by SMEs.

Africa’s SME sector faces an estimated $330 billion annual credit gap, yet presents unique opportunities due to several converging trends:

• Rapid smartphone adoption (projected to reach 81% in sub-Saharan Africa by 2030)
• Falling data costs increasing digital access
• The world’s largest mobile money market providing infrastructure for new payment solutions
• A vibrant startup ecosystem creating tech-enabled businesses across various sectors

These factors enable companies already serving SMEs—in areas like payments, logistics, agriculture, and healthcare—to leverage their customer data and build trust to offer tailored financial products.

A New Generation of Financial Service Providers

The 15 selected companies represent a diverse range of solutions from across the continent, including Ethiopia, Ghana, Kenya, Morocco, Nigeria, Senegal, South Africa, Togo, Uganda, and Zambia. They’re building on existing customer relationships to offer services like credit, insurance, and investment products directly within their platforms.

“The next generation of Africa’s small business banks won’t be banks; they’ll be startups that already understand how SMEs operate, have their data, and have earned their trust,” said Matthew Davis, Co-CEO of Renew Capital. “These 15 companies are building from that advantage.”

The Venture Lab provides comprehensive support including expert sessions with successful founders, a startup package valued at over $250,000, and potential investment opportunities for the most promising ventures.