Africa is currently one of the largest markets for cryptocurrencies in the world. In Nigeria, where I have lived all my life, there are over 33 million crypto users and traders. However, these numbers did not simply arise in a vacuum. Many Africans, like me, have grown to perceive cryptocurrencies as a viable alternative to traditional financial systems. This perception has contributed to the widespread adoption of decentralized finance in key African countries.
The concept of decentralized finance is undoubtedly revolutionary. It has birthed a financial ecosystem that provides a wide range of financial services without the need for intermediaries. It is unsurprising that the popularity of DeFi has skyrocketed in recent years. Worldwide the Total Value Locked (TVL) in DeFi protocols is currently over $54 billion – small compared to to TradFi, but definitely not insignificant.
There are projections that Africa will add over 100 million users to the DeFi pool in the coming years. This is unsurprising, as I have seen first-hand how DeFi seems to be the panacea to the numerous financial challenges we face on the continent. For us, DeFi is the silver bullet that perfectly addresses our problems.
DeFi and Africa’s Financial Inclusion Problem

Africa battles a severe financial inclusion problem. While the challenge has significantly improved in recent years, it is still prevalent. For instance, only about 43% of Africans are included in the financial system and over 50 percent of Africans do not have a personal bank account. This accounts for roughly 684 million people without a bank account. This high financial exclusion rate is not due to a mere aversion to the traditional financial system. Instead, they are birthed by the frustrations the average African is subjected to in the banking system.
For instance, traditional financial banks often charge high fees for their services. Hidden charges and exorbitant fees are a norm for the average Nigerian using traditional banks. Personally, I have had situations where my bank continually deducted fees under the guise of “SMS charges” or card maintenance. Nigeria’s economic situation is not exactly favorable, so the hidden exorbitant fees are a cost that many cannot afford to bear. More so, many Nigerians have lost their trust in traditional banks due to their penetrable security systems.
On a regular day on the Nigerian section of Twitter, there would always be a Nigerian complaining bitterly about hackers compromising their bank account and making unapproved withdrawals. In fact, the distrust is so deep that some Nigerians often believe that traditional banks intentionally integrate lax security systems to extort their customers. Owing to these trends, many would rather keep their funds from the traditional financial system than lose the little they have on the altar of bank charges or hack attacks.
Another driver of Africa’s financial inclusion problem is lack of proximity. More often than not, banking services are not available to individuals and businesses that need them. This issue is particularly prevalent in remote areas. For instance, I lived in Ibadan, a Nigerian city, for most of my university days. Ibadan only had ATM provisions in the city’s busy areas. Residents of outskirts like Egbeda had to either rely on POS merchants who were rarely available, or travel miles to access financial services at the banks.
The consequence of this high financial exclusion rate is that a significant proportion of Africans are constantly excluded from essential credit facilities. It could also hinder the continent’s financial development, as many individuals and businesses might not have access to financial products and services to cater to their needs. An Africa DeFi revolution could provide a more efficient route toward reducing the financial inclusion gap we experience on the continent.
Africa DeFi Revolution: Creating a Pathway for Financial Inclusion

DeFi protocols have numerous advantages when compared to traditional finance. When these benefits are considered within Africa’s financial inclusion challenge, DeFi’s utility will become even more prominent. First, DeFi protocols are easier to use and provide almost unrestricted access to every willing user. An African platform like Bekonta provides secure and unrestricted DeFi services to Africans.
Additionally, the documentation bottlenecks that have driven the continent’s financial exclusion are virtually non-existent on DeFi protocols. Users can obtain loans and negotiate interest rates without prohibitive documentation requirements. For instance, Xend Finance, Africa’s first DeFi protocol, enables users to save and invest with the basic requirement of a mobile phone and an email address. These services provide Africans like me with ease and remove all distance barriers that would ordinarily catalyze financial exclusion.
More importantly, DeFi provides a higher level of trust than traditional finance. This is because DeFi uses key blockchain attributes like immutability to build a secure and tamper-proof system around transactions.
Final Thoughts
The DeFi wave has been on a steady rise in Africa, and this momentum will not likely reduce anytime soon. While the crypto bubble has attracted criticism in many quarters, the crypto wave is more than just hype. For Africans like me, it is a pathway to financial liberation. As Alex Gladstein aptly described in his book, ‘Check Your Financial Privilege’, cryptocurrency has facilitated a new financial system where all participants are equal, and entry barriers are eliminated. Africans have found a place in this system, and we are set to leverage it to the fullest.
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