Leapfrogging Development: Mobile Money Ecosystems and the Emergence of Decentralized Finance (DeFi) Models in Sub-Saharan Africa

Abstract

Sub-Saharan Africa has demonstrated a remarkable capacity for technological leapfrogging, particularly in the domain of financial services. This research examines the evolutionary trajectory from mobile money ecosystems to the nascent adoption of decentralized finance (DeFi) models across the region. Through comprehensive analysis of mobile money penetration rates, blockchain technology adoption, and financial inclusion metrics, this study investigates how Sub-Saharan Africa's unique socioeconomic conditions have catalyzed the development of alternative financial infrastructures. The research reveals that mobile money platforms, exemplified by M-Pesa and its regional counterparts, have established a foundational digital financial literacy that positions the region advantageously for DeFi integration. Drawing on data from multiple sources including the World Bank, GSMA, and regional central banks, this paper demonstrates that the convergence of high mobile penetration rates, persistent financial exclusion, and innovative regulatory sandboxes has created an environment conducive to DeFi experimentation. The findings suggest that Sub-Saharan Africa's experience offers valuable insights for understanding how emerging economies can leverage decentralized technologies to address structural financial challenges while simultaneously presenting unique opportunities and risks that warrant careful consideration by policymakers, financial institutions, and technology developers.