Speaking on the sidelines of AFIS 2026 in Luanda, Angola, Uzoma Dozie, the previous Diamond Bank chief and Sparkle MFB CEO, argues that African banking is caught in a collateral lure, explains why digital banks should transfer past one-to-one funds, and particulars how AI can scale back the price of SME lending. GODFREY GEORGE studies.
Across Nigeria’s banking business, small enterprises and mass-affluent people account for a considerable share of the deposit base that funds industrial steadiness sheets. Yet, when those self same small companies apply for credit score, they obtain lower than 1% of complete financial institution lending.
For Uzoma Dozie, Managing Director and Chief Executive Officer of Sparkle Microfinance Bank, this disparity captures why capital is failing to help the true economic system.
Speaking to TechCabal on the Africa Financial Industry Summit (AFIS) in Luanda, the place the central theme was “Making Capital Count”, the veteran banker argued that standard lenders are held again by an outdated obsession with bodily collateral, locking out the very companies driving nationwide employment and gross home product.
“Capital tends to flow towards areas of certainty, even though every investment carries some level of risk,” Dozie mentioned. “What drives capital, particularly from a banking perspective, is trust. Take big businesses and large corporations: their accounts are audited and verified by professionals, so banks can lend based on information they trust.”
“But when you move down to small businesses and individuals, you are looking at the person. You may understand that they have a business, but you do not have sufficient information about that business. The bank either decides not to lend or lends at a price that reflects the perceived risk.”
To break this deadlock, Dozie argues that the definition of collateral should be utterly overhauled by way of transactional knowledge.
“Every small business generates data. Every transaction is data,” Dozie mentioned. “If we see data as information that can generate insights, we can use it to make credit decisions. For me, that is part of making capital count: changing our mindset about what constitutes collateral for small businesses and scaling lending by examining cash flows and business data. In some cases, this could even be less risky than traditional collateral-based lending.”
Moving past buzzwords
Dozie, who led Diamond Bank earlier than its merger with Access Bank, rejects the business’s rush to undertake superficial digital labels.
To him, expertise in banking shouldn’t be a latest novelty however a continuation of second-generation banking reforms that launched automated teller machines (ATMs), Internet portals, and cell banking functions to enhance buyer comfort.
Licenced as a microfinance financial institution, Sparkle, he famous, was designed to apply these classes to segments that conventional retail banking fails to serve effectively.
“When I hear people talk about wanting to become a digital bank, I think we have created names and buzzwords without really looking beneath the surface,” Dozie noticed.
“The difference between our service model and traditional personal banking is that we do not have people involved in every customer interaction. We do not rely on account officers to deliver our services. You cannot bank millions of Nigerians using a purely human-touch model. There is a limit to the consistency, repeatability, and operational efficiency you can achieve that way.”
Rather than competing immediately for the unbanked mass market or chasing customary retail transactions, Sparkle targets mass-affluent people and small enterprises whose financial actions intersect with the broader inhabitants.
“An affluent individual in Nigeria probably has four or five people they pay, including people who run small businesses,” Dozie defined. “On the small-business facet, it was by no means nearly offering a checking account. A checking account is a given as a result of each enterprise wants one. What was essential to us was offering enterprise help companies.
“We built these services to capture business data. Once we capture that data, we can use it to generate intelligence about the business, make better decisions, and help the business access credit or even connect with people interested in investing in it.”
Rethinking monetary inclusion
Dozie additionally challenged the way in which the monetary sector evaluates monetary inclusion, cautioning that tallying the variety of registered financial institution accounts can create a deceptive impression of progress.
In an economic system the place an estimated 100 million folks reside beneath the poverty line, an account with out an financial basis stays largely decorative.
“If we do not solve the problems of identity and social inclusion, financial inclusion will not happen,” Dozie mentioned. “A bank account is useful for making and receiving payments, as well as storing money. But if you have 100 million people living below the poverty line, financial inclusion cannot simply be about opening bank accounts for them.”
Meaningful inclusion, Dozie argued, requires structural integration the place authorities social help—starting from healthcare and insurance coverage to emergency aid and training—is channelled immediately by way of formal banking rails, giving residents a transparent cause to use an account.
At the enterprise stage, inclusion hinges on simplifying operational money flows. Small companies should pay workers, handle stock, and disburse wages, whereas households should pay home workers like safety guards and gardeners.
This operational actuality has formed Sparkle’s transaction focus. While many digital banks consider particular person, peer-to-peer (one-to-one) transfers, Sparkle has prioritised collective and multi-party flows: one-to-many funds, payroll schedules, and batch transfers.
“Anyone can facilitate one-to-one transactions,” Dozie famous. “But one-to-many, collective payments, and many-to-one transactions are areas where Sparkle specialises. If you look at what we offer, you will see that it is quite different from what other players are doing.”
Conversational companies and cheaper credit score
On synthetic intelligence, Dozie dismissed the notion that the expertise is merely speculative, pointing to sensible deployments throughout Sparkle’s advertising, buyer engagement, and credit score operations.
At the interface stage, conversational AI permits customers to talk of their most well-liked format and examine account balances immediately, stripping out administrative prices that beforehand required separate software program instruments or customer support workers.
For industrial debtors, machine studying algorithms analyse inside money flows, matching fee patterns in opposition to market dynamics to construct a extra correct monetary profile than conventional paper statements allow.
“Internally, AI allows us to use customers’ cash flows to identify insights and correlations between their payments, their markets, and their business activities,” Dozie mentioned. “We can then use that information to make better credit decisions. This helps us reduce the cost of lending and potentially offer credit at lower interest rates than would ordinarily be possible through traditional lending models.”
Dozie added that this analytical functionality can be accessible to retailers, offering them with insights into their operational efficiency and buyer behaviour.
“They give us access to their data, and we use it to provide insights that help them make better decisions,” Dozie mentioned. “At the same time, we use that information to make better decisions about how we serve them and grow alongside their businesses. For us, it is not just a buzzword. We are only scratching the surface.”
