Unique Interview with Tamu Dutuma,
Head of Technique & Transformation,
Absa Regional Operations (ARO) – Expertise
SMEs drive practically half of sub-Saharan Africa’s GDP. Out of your vantage level, what’s the largest untapped alternative in unlocking SME progress on the continent?
One of many greatest untapped alternatives for SME progress in Africa lies in serving to small companies connect with regional and world worth chains. Proper now, many SMEs function solely inside their native communities, lacking out on the broader market potential. However with initiatives just like the African Continental Free Commerce Space (AfCFTA), Africa’s markets have gotten extra built-in, making cross-border commerce extra accessible than ever.
To unlock this chance, we have to make it simpler for SMEs to commerce throughout borders by simplifying funds, streamlining logistics, while making working capital options and funding out there and decreasing compliance limitations. When small companies can transfer items and companies extra simply between nations, they will scale quicker, attain new clients, and develop into aggressive gamers throughout the continent and past.
How do you see expertise altering the position SMEs play in Africa’s financial transformation?
Expertise is a strong equaliser for SMEs in Africa. Previously, small companies struggled to compete with giant firms attributable to an absence of economic entry, restricted attain, assets, and operational capability. As we speak, digital instruments are serving to stage the taking part in discipline. Cellular funds, for instance, now enable micro-enterprises to commerce throughout borders – a problem not so way back. SMEs can attain and transact with their clients rather more simply and settle for funds seamlessly with no need to put money into infrastructure. Cellular service provider buying and cost acceptance functions are giving SMEs entry to instruments that have been as soon as solely out there to massive corporations. Knowledge analytics additionally assist small retailers higher perceive their clients and make smarter choices.
What’s actually transformative is how expertise will increase visibility. Many SMEs function informally and stay invisible to banks, traders, and world patrons. With digital platforms, these companies can formalise, construct a digital footprint, and entry new alternatives – from financing to worldwide markets. This shift means SMEs are now not simply supporting the economic system, they’re actively shaping Africa’s digital and financial future.
Past entry to capital, what systemic or structural challenges maintain again African entrepreneurs and what sorts of interventions actually transfer the needle?
Past entry to capital, African entrepreneurs face a number of structural challenges that may restrict their progress. Many lack sturdy networks – whether or not with traders, corporates, or friends. Others battle to seek out technical help to enhance their merchandise or mentorship to assist them navigate the journey of scaling their companies. Even promising concepts usually stall on the proof-of-concept stage as a result of the fitting steering or supportive ecosystem isn’t in place.
That is the place interventions just like the MEST Africa Problem 2025 actually transfer the needle. They transcend funding by creating an surroundings the place startups can entry mentorship, networks, and market publicity. These are the components that assist younger companies develop sustainably, whether or not inside their nation or throughout markets.
What classes has Absa discovered from working with SMEs and startups that different corporates ought to take note of?
One among our greatest classes is that innovation have to be anchored in core enterprise technique, not handled as a facet mission. When Absa first launched devoted innovation hubs, we noticed that whereas they inspired exploration, their impression was restricted with out full enterprise buy-in. Startups thrive when their options are embedded in actual enterprise challenges, not remoted within the “innovation theatre.”
Enterprise buy-in and prioritisation are essential. For partnerships to succeed, working items, these accountable for supply and P&L, have to be concerned from the beginning. With out this, even sturdy concepts stall at pilot stage attributable to lack of integration and clear paths to scale.
Strategic focus additionally issues. Chasing broad, fashionable themes creates noise however slows execution. Actual traction comes when corporates and startups co-create well-defined alternative areas that align with actual buyer wants and income targets.
The largest lesson is that partnership, not patronage, unlocks worth. Startups don’t need to be “supported” in a paternalistic sense; they need to co-create. They thrive when corporates deal with them as equal companions, open distribution networks and infrastructure, share insights and supply platforms for scale.
How does the MEST Africa Problem transcend being a pitch competitors to behave as an actual catalyst for digital transformation and ecosystem constructing?
Pitch competitions can typically be transactional – one winner, one cheque and a highlight second. The MEST Africa Problem 2025 is designed to be rather more. It connects startups and FinTechs with mentors, traders, and corporates throughout markets, creating relationships that final past the pitch.
Startups acquire regional visibility and sensible help to scale past their dwelling nations. By specializing in actual enterprise challenges and offering entry to networks and market alternatives, the Problem helps flip promising concepts into sustainable ventures. Its ecosystem strategy ensures that innovation is nurtured, not simply showcased.
Why is it necessary for corporates like Absa to have interaction on the early-stage startup stage, reasonably than solely with extra established companies?
Small and medium enterprises (SMEs) are the spine of Africa’s economic system. Analysis exhibits they account for c.95% of all registered companies and contribute round 50% of sub-Saharan Africa’s GDP. But, many SMEs battle to outlive past the early levels attributable to lack of entry to the fitting assets, mentorship, and networks wanted to scale.
Partaking with startups and early-stage SMEs ensures that these essential gamers are supported whereas they’re rising, serving to them overcome early challenges and growing their probabilities of long-term success. By offering steering, partnerships, and entry to markets early on, corporates like Absa not solely assist SMEs thrive but in addition strengthen the broader economic system. Supporting SMEs at the beginning is an funding within the continent’s financial resilience and future progress.
Which innovation traits (Insurtech, funds, Agri-Tech, cross-border commerce) do you suppose will most reshape African markets within the subsequent 5 years?
Funds and cross-border commerce shall be among the many most transformative traits for African markets. Digital cost options like MobiTap, an Absa product, which has been launched in a number of of our African markets, are already a game-changer for SMEs, enabling them to obtain funds rapidly and simply utilizing a cell phone. This not solely simplifies transactions but in addition brings beforehand unbanked companies into the formal monetary system, supporting monetary inclusion.
Fixing the challenges of cross-border funds is equally essential. SMEs usually face excessive prices, gradual transfers, and regulatory hurdles when buying and selling throughout borders. Improvements that make these transactions seamless and inexpensive unlock entry to bigger markets, stimulate commerce, and permit African companies to compete regionally. Over the subsequent 5 years, the mix of cellular funds, digital wallets like MobiTap, and environment friendly cross-border options will reshape how African companies function, develop, and drive financial progress.
Are you able to share examples of how startups are addressing actual buyer ache factors in ways in which bigger establishments could battle to?
Fintechs are driving among the most modern options in Africa, tackling urgent buyer challenges similar to monetary inclusion, digital literacy, and employment creation. In accordance with McKinsey, fintech revenues might attain as much as USD 47 billion by 2028, reflecting not solely market progress but in addition elevated collaboration between disruptors and banks. By leveraging their nimbleness and one another’s strengths, they ship extra streamlined companies, develop choices, and enhance worth propositions for each current clients and underserved communities.
At Absa, we now have actively collaborated with fintechs to unlock new alternatives and develop entry. One instance is our partnership with Timiza, Absa’s cellular banking platform in Kenya, which permits customers, together with people and small companies, to entry prompt loans, save, pay payments, purchase airtime, and switch cash immediately from their cell phones. Timiza has been instrumental in increasing monetary inclusion and serving to SMEs handle money circulate and develop their companies.
All these collaborations present how startups and agile digital platforms can tackle buyer ache factors that bigger establishments could battle with alone.
What does efficient ecosystem collaboration between banks, startups, and accelerators seem like in follow?
Efficient collaboration occurs when everybody performs to their strengths. Banks present capital, belief, and regulatory know-how; startups carry innovation, pace, and shut buyer understanding; and accelerators provide mentorship, construction, and expertise. In follow, this implies banks open APIs and strategically provision steadiness sheet to companion with startups, accelerators choose and help promising entrepreneurs, and startups co-create options with corporates.
Wanting forward, what position do you see Absa taking part in in shaping Africa’s digital economic system over the subsequent decade?
Our purpose is to be a digitally powered enterprise, reworking our expertise with our clients on the centre, to empower Africa’s future. It’s about making funds simpler, driving monetary inclusion, and delivering seamless digital experiences. Via the MEST Africa Problem 2025, we intention to determine FinTechs that may assist us develop options throughout key areas, together with digital funds, digital monetary inclusion and different lending, embedded ecosystem banking, AI, knowledge and fraud prevention, and open banking. Expertise and digital transformation will proceed to be central to this imaginative and prescient, enabling us to create sensible, scalable options that can develop entry, enhance comfort, and ship higher worth for our clients throughout Africa within the years forward.
