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.