Africa's private credit market triples to $5.6B

Private credit in Africa has surged, tripling in size to reach $5.6 billion by the end of 2025, according to a new Moody's report. This significant growth, more than threefold increase in five years, is attributed to loans made by investment funds and other non-bank investors, rather than traditional banks. Despite this impressive growth, the African private credit market still represents a mere 0.3% of the global private credit market, which stands at $1.8 trillion.

The report's authors suggest that pooling African loans could be the key to unlocking even greater potential. Development-finance institutions could assume some of the risk involved, making the safer portion of these loans attractive to pension funds, insurers, and other large global investors who may otherwise avoid such investments.

Moody's predicts that these structures will attract substantial pools of private capital into Africa, potentially making private credit a vital source of long-term financing for infrastructure and businesses that banks either cannot or choose not to fund. The report highlights the challenges facing African banks, which are constrained by government borrowing and shallow domestic savings. Moreover, Africa faces an estimated infrastructure financing gap of up to $100 billion annually.