In many African fintech circles, the word “profit” is spoken cautiously, sometimes apologetically. Growth is celebrated. Scale is rewarded. Profit, on the other hand, is treated like something that will magically appear later, once the “real work” is done.
This framing has done more harm to lending businesses than we are willing to admit.
Profit is not a betrayal of purpose. It is not evidence of greed. It is not the opposite of impact. Profit is the signal that a system is working. Without it, lending businesses become fragile, dependent, and ultimately unable to serve anyone sustainably.
The Growth Story We Like to Tell
The dominant narrative goes something like this: acquire customers aggressively, disburse as much as possible, tolerate early losses, and trust that scale will fix everything. Better data will arrive. Models will improve. Costs will come down. Defaults will stabilise.
Sometimes that happens. Often, it does not.
What is rarely interrogated is whether the underlying economics ever made sense in the first place. Growth hides inefficiency. It delays hard conversations. It creates the illusion of progress while quietly accumulating risk.
Scale Does Not Correct Bad Assumptions
One of the most dangerous assumptions in lending is that scale automatically improves outcomes.
Scale does not fix mispriced risk. It does not repair broken collections processes. It does not correct weak governance. In fact, it amplifies them.
A lender losing money on every loan does not become profitable by doing more of the same. They become larger and more exposed.
Sustainable scale is a consequence of sound fundamentals, not a substitute for them.
Understanding Profit as a System Outcome
Profit in lending is not a single lever. It is the outcome of multiple interacting decisions.
Pricing decisions affect borrower behaviour. Risk thresholds affect default rates. Collections efficiency affects cash flow timing. Operational efficiency affects cost structures. Governance affects loss containment.
When one part of the system is weak, profit becomes fragile. When several are weak, profit becomes accidental.
This is why isolated optimisation rarely works. You cannot fix profitability by adjusting pricing alone if collections are ineffective. You cannot fix it by tightening risk alone if acquisition costs are unsustainably high.
The Cost of Avoiding the Conversation
Avoiding profitability discussions often feels polite, especially in impact-driven contexts. But the cost of avoidance is high.
Businesses that are not profitable eventually make compromises. They cut corners. They underinvest in controls. They pressure teams to chase volume. They take risks they do not fully understand.
Ironically, this often leads to outcomes that are worse for customers and the broader ecosystem.
Profit enables patience. It enables investment. It enables ethical choices.
Redefining What “Success” Looks Like
A successful lending business is not the one with the largest loan book. It is the one that can explain, clearly and honestly, how value is created and preserved over time.
That requires discipline. It requires saying no to growth that looks good on paper but weakens the system. It requires leadership that understands trade-offs, not just targets.
Profit is not the enemy. Confusion is.
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If you are building, operating, or advising a lending business, these are not abstract ideas. They are practical decisions that show up every day in pricing, risk, operations, collections, and governance.
At Aakkio, we teach lending the way it actually works in practice. Our academy is designed for founders, operators, product leaders, risk professionals, and finance teams who want to understand the full picture, not just one function in isolation.
You can explore our courses and learning paths at Aakkio Academy, where we go deeper into the frameworks, examples, and real-world trade-offs behind the topics discussed here.
Oke Egbi
Founder & Principal Consultant, Aakkio Consulting
Senior fintech executive and lending expert with over a decade of experience building, scaling, and advising credit-led financial products across Africa.
