Innovative credit models in Africa – An FSD Africa and Intellecap Publication

Established in 2012 and supported by UK aid, FSD Africa is a specialist development agency working to build and strengthen financial markets across sub-Saharan Africa.
FSD Africa is incorporated as a non-profit company limited by guarantee in Kenya. It is funded by UK aid from the UK government. They work to reduce poverty through a ‘market systems development’ approach, which means we aim to address the structural, underlying causes of poverty by improving how financial market systems function.
As part of FSD Africa work in credit markets, they aim to contribute to a greater understanding of factors that inhibit the growth of credit markets in sub-Saharan Africa. FSD Africa partnered with Intellecap to undertake research on market innovations in retail credit markets.
The objective was to assess innovative models emerging in selected countries – South Africa, Nigeria, Kenya, Tanzania and Rwanda – and to identify the critical factors for success. The region continues to face a myriad of challenges across the spectrum of the lending value chain, which affect credit access. These include low-income levels, poor infrastructure, weak policy and a high cost of credit.
In the face of these challenges, innovative digital technologies and business models are emerging in an attempt to solve credit access challenges. The report identifies over 30 credit innovations that leverage technology, multiple data sources and partnerships to enhance access and delivery of financial services to underserved segments across the continent.
The insights generated through the research are intended to highlight market opportunities and challenges, and will be of value to policymakers, regulators, credit providers, financial sector analysts, as well as others interested in supporting credit market growth in the region.