Africa Alternative Lending Market Size & Forecast by Value and Volume Across 100+ KPIs by Type of Lending, End-User Segments, Loan Purpose, Finance Models, Distribution Channels, and Payment Instruments - Databook Q1 2026 Update

Key Trends & Drivers

1. Tighten operating models as regulators move from “apps” to supervised credit markets.

• More African markets are shifting alternative lending from a loosely defined “digital loans” category into formal licensing, conduct rules, and enforceable consumer-protection regimes, with regulators explicitly targeting how lenders price, collect, and use customer data.
• Kenya: the Central Bank of Kenya (CBK) has continued rolling out licensing decisions for Digital Credit Providers as part of a broader push to formalize non-deposit-taking credit activity.
• Nigeria: the Federal Competition and Consumer Protection Commission (FCCPC) introduced a 2025 framework for digital / online consumer lending, signalling a more enforcement-led approach to lender behaviour and governance.
• Ghana: The Bank of Ghana issued a 2025 directive for Digital Credit Services Providers, setting expectations around licensing, ownership, systems controls, and supervisory access.
• Borrower harm and reputational risk from aggressive collections and opaque terms pushed supervisors to treat digital lending like a mainstream retail-credit market (not a fintech niche). Mobile-first distribution makes it easy for non-traditional lenders to scale quickly; regulators are reacting by standardizing “who can lend” and “how lending is conducted,” especially around data access and recovery practices.
• Higher barriers to entry: weaker operators exit or consolidate; partnerships with licensed entities become a primary route to market. More auditable lending: stronger reporting, clearer accountability for underwriting/collections, and tighter controls over data use.
• Competitive advantage shifts toward platforms that can run compliant credit at scale (policy, controls, dispute handling), not just acquire borrowers fast.

2. Win distribution by embedding credit inside mobile money, telco channels, and everyday spend loops.

• Alternative lending is increasingly delivered through high-frequency rails, mobile money, and telecom channels, where credit becomes part of day-to-day liquidity management rather than a standalone loan product.
• Kenya: Safaricom’s M-PESA “Fuliza” remains a flagship example of an overdraft-like facility integrated into payments; competitive pressure is emerging as Airtel signals a similar overdraft product.
• Pan-African telco-led lending enablement: Orange Money Group partnered with JUMO to expand mobile credit services, underscoring the telco fintech “credit factory” model.
• Airtime/telecom-based microcredit at scale: Optasia’s model, distributed via operators including MTN, Vodacom, and Airtel, highlights how telecom ecosystems serve as repeatable credit-distribution infrastructure.
• Always-on payments behaviour: mobile money and telco channels capture frequent, small transactions, creating repeat engagement and repayment touchpoints.
• Merchant and consumer liquidity needs: informal income patterns make short-duration, high-frequency credit attractive when it’s frictionless and close to the transaction.
• Platform economics: embedding credit reduces acquisition cost and supports retention in crowded wallet/payment markets. Competition concentrates around distribution gatekeepers (MNOs, large wallets, major merchant acquirers).
• Risk management becomes product design: lenders will differentiate via limit-setting, dynamic repayment controls, and customer treatment because embedded credit is always visible to the ecosystem. Regulators will scrutinize embedded credit more directly (especially pricing, disclosures, collections, and affordability), pushing platforms to harden governance.

3. Scale SME credit by financing inventory and invoices through B2B commerce ecosystems.

• Across Africa, alternative lending is moving “closer to the cash register” for small businesses: inventory finance, supplier credit, and receivables-based lending delivered through B2B commerce and distribution networks.
• Egypt / regional B2B commerce: MaxAB-Wasoko’s acquisition of Egypt’s Fatura is explicitly linked to layering embedded services (including credit access for stock purchases) into merchant networks.
• Policy and ecosystem attention on supply chain finance (SCF): UNCTAD’s 2025 work points to SCF as a route to liquidity for firms in African markets, reinforcing the strategic focus on receivables and buyer-led financing structures.
• Retail and informal trade structures: many SMEs operate through fragmented supply chains; financing inventory and receivables more closely aligns with how cash flows in these sectors.
• E-commerce and B2B digitization: as B2B ordering and fulfilment become more trackable, platforms can tie credit decisions to purchase behaviour and repayment events (delivery, sales cycles). Shift in underwriting anchor from borrower self-reported income to transaction-linked performance (orders, delivery cadence, invoice approval).
• More structured credit products: short-cycle working capital, supplier-linked limits, and receivables financing become core growth engines. Consolidation around platforms with distribution reach (B2B marketplaces, aggregators, merchant networks) as they can enforce repayment via operational controls (stock, settlement, invoice flows).

4. Expand asset-backed consumer finance as pay-as-you-go models industrialize underwriting and collections.

• The strongest scaling path for many consumer lenders is increasingly asset-backed financing, especially pay-as-you-go (PAYGo) energy and device financing, where the product itself provides a control mechanism and a tangible value exchange.
• PAYGo solar finance: Sun King’s PAYGo model and its use of capital markets-style structures (e.g., securitization of receivables) demonstrate how consumer repayment streams are converted into fundable assets.
• Energy access gaps and device demand: households and microbusinesses prioritize power and connectivity; PAYGo aligns payment schedules with affordability constraints.
• Funders prefer controllable risk: asset-linked repayment structures and receivable pools are easier to diligence than unsecured mass-market digital loans. More lenders pivot toward secured or quasi-secured products (devices, energy, productive assets), especially where unsecured credit performance is volatile. Greater use of structured funding (local currency facilities, securitizations, receivable-backed instruments) as PAYGo portfolios mature.
• Category spillover: techniques proven in PAYGo (remote controls, instalment enforcement, servicing discipline) get reused in other asset classes (mobility, appliances, smartphones).

5. Rebuild trust by hardening affordability, disclosures, and “customer treatment” as a core operating capability.

• Alternative lenders are being forced by regulation and distribution partners to treat fair treatment, disclosure, and complaint handling as operational requirements rather than brand positioning. Nigeria’s 2025 FCCPC regime is a clear example of the direction of travel.

• Platform dependence: MNOs, wallets, and large merchant ecosystems cannot absorb reputational risk from abusive credit practices, so they demand stricter controls from lending partners. Operating costs rise for compliance, monitoring, and complaint resolution, giving larger players an advantage. “Responsible lending” becomes a procurement filter: distribution partners will prefer lenders that can evidence governance and customer protections.
• Product design changes: more emphasis on transparent terms, clearer repayment schedules, and controlled collections processes.

6. Reduce currency and funding fragility by shifting from venture-led growth to bank, DFI, and receivables-backed funding.

• Alternative lenders are increasingly funding portfolios using institutional debt, development finance, and receivables-backed structures, rather than relying primarily on equity funding cycles.
• Receivables-backed capital: Sun King’s securitization illustrates how repayment streams are being used to raise longer-tenor funding.
• DFI-backed credit expansion: IFC’s financing to support PAYGo lending growth signals continued appetite for structured credit exposure.
• Cost of capital sensitivity: lenders need funding structures that align with loan tenors and reduce refinancing risk.
• Risk discipline from funders: banks/DFIs require clearer portfolio performance visibility and stronger controls, pushing the sector toward institutional-grade reporting and governance.
• More durable lenders emerge: those with repeatable funding access (banks/DFIs/capital markets) outcompete those dependent on episodic equity raises. Portfolio strategy shifts toward products that can be financed efficiently (secured lending, receivable pools, merchant-linked cashflows). Local currency structures become more common where feasible, especially for longer-tenor consumer and asset finance.

Competitive Landscape

• Competitive intensity is likely to shift from acquisition speed to licensing, governance, and distribution access as Nigeria, Kenya, and Ghana tighten rules. Expect more platform-led partnerships (telcos, wallets, B2B networks) and selective M&A to secure compliant scale and lower customer acquisition costs.

Current State of the Market

• Africa’s alternative lending competition is regionally fragmented: East Africa is shaped by mobile-money distribution, West Africa by enforcement-led consumer-lending oversight, and North Africa by B2B commerce-led credit embedded in supply chains. Regulatory action is increasingly defining “who can compete.” Nigeria’s FCCPC introduced Digital/Electronic/Online/Non-traditional Consumer Lending Regulations in 2025, moving digital lending toward clearer registration and conduct expectations.
• Kenya continues formal supervision through the Central Bank of Kenya’s updated directory of licensed Digital Credit Providers (updated December 24, 2025), which changes go-to-market economics for non-licensed players. Ghana’s Bank of Ghana issued a directive (effective November 1, 2025) on Digital Credit Services Providers, signalling tighter licensing and operating requirements for digital credit delivery.

Key Players and New Entrants

• Telco/mobile-money ecosystems remain key distribution gatekeepers: Safaricom (M-PESA) sets competitive benchmarks for embedded credit, while Orange Money is expanding its credit capabilities through partnerships. Credit infrastructure fintechs (e.g., JUMO) increasingly act as enabling layers for telcos and wallets, rather than competing only as standalone lenders.
• Asset-finance leaders (e.g., Sun King, M-KOPA) compete through device/PAYGo models that link repayment to product usage and servicing discipline. Banks are re-entering the story through regional expansion: Nedbank’s announced acquisition of a majority stake in Kenya’s NCBA highlights intensifying bank-led competition in digitally active markets.

Recent Launches, Mergers, and Acquisitions

• Partnerships to expand embedded credit: Orange Money Group and JUMO (July 2025). B2B commerce consolidation: MaxAB-Wasoko’s acquisition of Egypt’s Fatura (May 2025) strengthens merchant distribution and embedded working-capital playbooks.

This is a bundled offering, combining the following 5 reports, covering 700+ tables and 850+ figures:

• Africa Overall Lending and Alternative Lending Market Business and Investment Opportunities Databook
• Egypt Overall Lending and Alternative Lending Market Business and Investment Opportunities Databook
• Kenya Overall Lending and Alternative Lending Market Business and Investment Opportunities Databook
• Nigeria Overall Lending and Alternative Lending Market Business and Investment Opportunities Databook
• South Africa Overall Lending and Alternative Lending Market Business and Investment Opportunities Databook

Report Scope

Macroeconomic Overview: Economic Indicators

• by Gross Domestic Product (Current Prices)
• by Population
• Unemployment Rate

Operational Enablers and Infrastructure Readiness

• Smartphone Penetration
• Internet Connectivity & Broadband Access
• Digital Wallet Adoption Rate
• Real-Time Payments Infrastructure
• E-commerce Penetration

Lending Market Size and Growth Dynamics

• Loan Disbursement Value
• Loan Disbursement Volume
• Average Loan Ticket Size

Lending Market Segmentation by Lending Type

• Bank-based / NBFC Lending
• Alternative Lending

Lending Market Segmentation by End-User

• Retail Lending
• SME / MSME Lending

Retail Lending Market Segmentation by Loan Purpose

• Housing / Mortgage Loans
• Auto Loans
• Education Loans
• Personal Loans
• Other Retail Loan Types (e.g., BNPL, Travel, Green Loans, Payday)

SME / MSME Lending Market Segmentation by Loan Purpose

• Working Capital Loans
• Expansion Loans
• Equipment / Machinery Loans
• Invoice Financing / Factoring
• Trade Finance (Import / Export)
• Real Estate / Commercial Property Loans
• Other SME Lending (e.g., Digital Adoption, Franchise Financing)

Lending Market Segmentation by Distribution Channel

• Branch / Physical
• Direct Digital Lending
• Agent / Broker Channel

Alternative Lending Market Size and Growth Dynamics

• Loan Disbursement Value
• Loan Disbursement Volume
• Average Loan Ticket Size

Alternative Lending Market Segmentation by End-User

• Consumer Lending
• SME / MSME Lending

Alternative Lending Market Segmentation by Finance Models

• P2P Marketplace
• Balance Sheet Lending
• Invoice Trading
• Real Estate Crowdfunding
• Other / Hybrid Models

Combined View: Finance Models by End-User Segments

• P2P Marketplace - Consumer Lending / SME Lending / Property Lending
• Balance Sheet Lending - Consumer Lending / SME Lending / Property Lending

Alternative Lending by Loan Purpose - Consumer Lending

• Personal Loans
• Payroll Advance
• Home Improvement Loans
• Education / Student Loans
• Point-of-Sale (POS) Credit
• Auto Loans
• Medical Loans
• Other Consumer Lending Types

Alternative Lending by Loan Purpose - SME / MSME Lending

• Lines of Credit
• Merchant Cash Advance
• Invoice Factoring
• Revenue-Based Financing
• Other SME Loan Types

Alternative Lending Segmentation by Payment Instrument

• Credit Transfer
• Debit Card
• E-Money
• Other Instruments

Cross-Segmentation: Finance Models across Payment Instruments

• P2P Marketplace across Credit Transfer / Debit Card / E-Money / Other
• Balance Sheet Lending by Payment Instrument
• Invoice Trading by Payment Instrument
• Real Estate Crowdfunding by Payment Instrument
• Other Models by Payment Instrument

Alternative Lending - Borrower-Level Insights: Consumer Demographics & Behavior

• Borrower Distribution by Age Group
• Borrower Distribution by Income Level
• Borrower Distribution by Gender

Alternative Lending Credit Risk & Quality Metrics

• Delinquency Rate (30 Days / 90 Days), 2024

Reasons to buy:

• Comprehensive Market Intelligence: Gain an integrated view of the overall and alternative lending landscape, combining macroeconomic context with detailed lending performance indicators such as loan disbursement value, volume, and average ticket size.
• Granular Coverage of Alternative Lending: Explore the fast-evolving alternative lending ecosystem, including peer-to-peer (P2P) marketplaces, balance sheet lending, invoice trading, real estate crowdfunding, and hybrid finance models, supported by in-depth segmentation by end-user, loan purpose, and payment instrument.
• Segment-Wise Insights and Cross-Analysis: Evaluate lending trends across consumer and SME/MSME segments, using advanced cross-segmentation to link finance models, loan purposes, and payment methods, offering a comprehensive understanding of credit origination dynamics.
• Borrower-Level Behavioral Analytics: Understand borrower demographics and credit behavior through data on age, income level, gender distribution, and delinquency rates (30-day and 90-day), enabling sharper credit risk assessment and customer targeting.
• Digital Infrastructure and Ecosystem Readiness: Assess the enabling digital ecosystem including smartphone penetration, internet access, digital wallet adoption, and real-time payments infrastructure that underpins the growth of fintech-driven lending models.
• Data-Driven Forecasts and KPI Benchmarking: Access a comprehensive dataset of 100+ key performance indicators (KPIs) with historical and forecast data through 2030, providing visibility into emerging lending trends, growth drivers, and investment opportunities.
• Decision-Ready Databook Format: Delivered in a data-centric, easy-to-analyze format, the Databook supports integration into financial models, strategy decks, and investor presentations, enabling stakeholders, including banks, fintechs, investors, and policymakers, to make informed, evidence-based decisions.