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We Need to Talk About Credit

In the past five years, we have seen a lot of change in how credit markets are developing, not least because of the rapid growth in digital credit associated with mobile financial services. But how much do we actually know about digital credit? And how does it relate to other types of credit in the markets we care about? How is this new availability of credit contributing to the ability of low-income people to seize opportunities and manage risks?

Until recently, there has been very little supply-side data on the availability of formal credit in Africa, but that is starting to change. FSD Africa has been working with regulators over the past few years to start shining a light on how credit markets are evolving in the region — first in Zambia, with Tanzania and Ghana to follow. And what they have found is eye opening.

This informative blog post from CGAP explores credit at a household and SME level and makes some recommendations for regulation.

CGAP is a global partnership of more than 30 leading development organizations that works to advance the lives of poor people through financial inclusion. Using action-oriented research, we test, learn and share knowledge intended to help build inclusive and responsible financial systems that move people out of poverty, protect their economic gains and advance broader development goals. We research and experiment to achieve proof of concept and extract lessons that can be built to scale by our partners, who apply our insights in the marketplace.

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