Moody's forecasts continued growth for Africa's expanding private credit sector

Moody's analysis indicates that Africa's private credit market, though still modest, has surged from US$1.8 billion in 2020 to US$5.6 billion at the close of 2025, and is set to keep growing. The surge is fueled by a chronic financing shortfall, weak capital markets and banks' reluctance to provide long-term loans, especially for infrastructure and medium-sized enterprises. Development finance institutions are expected to continue supplying capital, often through credit-enhanced or blended-finance deals that can appeal to institutional investors such as pension funds and insurers.

Despite rapid growth, Africa still represents only about 0.3 percent of the global private credit pool, estimated at US$1.8 trillion. Private credit funds typically partner with banks rather than replace them, particularly in large infrastructure projects. Scaling up will require consistent returns that can compete with opportunities elsewhere, given investor wariness of frontier-market risk and mixed performance of existing Africa-focused funds. The report also highlights that the continent's stock-market capitalization remains low, at roughly 33 percent of GDP in 2024.