Dar es Salaam. Small and medium-sized enterprises (SMEs) continue to drive economic activity across Africa, accounting for the majority of employment and serving as the primary source of income for millions of households.
Despite their importance, access to formal credit remains out of reach for many SMEs, particularly those operating within the informal economy and without conventional banking records.
Across East Africa and much of Sub-Saharan Africa, SMEs rely heavily on mobile money to receive payments, pay suppliers, purchase inventory and settle utility bills.
While these transactions reflect real economic activity, they are rarely captured by traditional banks, leaving many viable businesses financially invisible and unable to access loans for growth and expansion.
It is this disconnect between economic participation and financial visibility that fintech start-up Black Swan is working to address.
Speaking after participating in the MEST Africa Challenge 2025, powered by Absa, and won $50,000, Black Swan CEO and co-founder Derick Kazimoto said the company was founded on the belief that Africa’s greatest financial opportunity lies in those who have been overlooked by conventional banking systems.
“The world is used to seeing white swans, so when you encounter a black swan, it challenges what is considered normal. For us, these black swans are millions of individuals and SMEs with real financial potential that banks are simply not seeing,” he said
Mr Kazimoto said traditional banking models continue to rely heavily on formal credit histories, excluding a large segment of capable borrowers who operate outside the formal ecosystem
“Personally, I have never received a bank loan in my life,” he said. “The only credit I have accessed has been digital credit from telecom companies. If people like myself struggle to access credit, then there is an even larger underserved segment facing the same challenge.”
Black Swan’s solution is built around the use of alternative data to create visibility for these borrowers.
This includes mobile money transactions, utility payments and merchant payment histories that demonstrate financial behaviour and reliability over time.
The company’s participation in the Wazo Challenge, an innovation competition organised by Absa Tanzania, further shaped its approach.
According to Mr Kazimoto, the programme provided critical insight into what it takes to work with a multinational bank operating across multiple markets.
“Building for one country is relatively easy,” he said. “The real challenge is designing a solution that can work across nine, ten or even thirteen markets. The wazo Challenge pushed us to think beyond borders.”
This shift has influenced Black Swan’s product design, ensuring it can be deployed in countries such as Kenya, Uganda, Zambia and Malawi.
Low banking penetration across East Africa and much of Sub-Saharan Africa remains a major obstacle to financial inclusion.
However, Mr Kazimoto said widespread access to mobile phones presents a unique opportunity.
“In East, Central and West Africa, almost everyone has a SIM card,” he said.
“That single fact unlocks everything.” In markets where mobile money is widely used, every transaction generates data that can be transformed into a financial footprint.
“Each transaction is a pulse of digital visibility,” Mr Kazimoto said.
“It allows us to build a financial profile for people such as a woman trader in Kariakoo or a small merchant in Kisii, Kenya.”
For SMEs, everyday transactions can serve as reliable credit signals.
Mr Kazimoto cited examples such as consistent electricity payments, airtime and data purchases, and merchant transactions conducted through Lipa numbers.
“A Lipa number essentially becomes a business’s transaction history,” he said. “It shows cash flow patterns and payment consistency, yet many banks are not using this data to offer credit.”
According to Black Swan, the main barrier to financial inclusion is not access, but visibility.
“Before banks can provide access, people must first be visible,” Mr Kazimoto said. “Our goal is to make individuals and SMEs visible so that banks can onboard them and make them bankable.”
He described the current market as dominated by first-generation digital credit products, such as mobile money loans, which have successfully expanded access but remain limited in scope.
“Mobile network operators have already solved the access problem,” he said. “What remains is the visibility problem.”
Black Swan is now developing what it describes as the second generation of digital credit, focusing on assigning a financial identity that enables sustainable, long-term lending.
The company received 50,000 US dollars through the competition, funding Mr Kazimoto said is essential for piloting and validating the model.
“The funding allows us to test, learn and refine our solution before scaling,” he said.
By leveraging alternative data from the informal economy, Black Swan aims to help unlock an estimated 700-billion-dollar credit gap across Africa.
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