By Marc Jones.
Africa’s private credit market is set for further expansion as companies and infrastructure projects seek alternatives to constrained bank lending, credit ratings firm Moody’s said in a report on Tuesday.
The continent’s private credit industry remains small but has grown rapidly in recent years, with assets under management rising to $5.6 billion at the end of 2025 from $1.8 billion in 2020, according to the report.
Moody’s said demand would continue to be supported by the region’s persistent financing gap, underdeveloped capital markets and limits on banks’ ability and willingness to provide long-term financing, particularly for infrastructure projects, medium-sized companies and small businesses.
The report added that even after the rapid growth in recent years, Africa accounts for just 0.3% of the global private credit market, which is estimated to be worth at least $1.8 trillion.
The ratings agency said development finance institutions would remain a key source of funding for the sector in Africa and could help mobilise international capital through credit-enhanced and blended-finance structures.
Such arrangements could support highly rated senior loan tranches and broaden the appeal of African private credit to institutional investors including pension funds and insurers.
At the same time, private credit is unlikely to become a major competitor to African banks, as funds often lend through banks or co-finance transactions, particularly in infrastructure, where financing needs remain substantial.
Moody’s said achieving significant scale would require the industry to demonstrate consistent returns that compete with opportunities elsewhere, particularly given investor concerns about frontier-market risk and the mixed historical performance of Africa-focused private investment funds.
The report also highlighted that stock market capitalisation across the continent stood at around 33% of GDP in 2024, well below the respective emerging market and global averages of 61% and 113%.
© 2026 Reuters.