Africa's private credit market is set to continue expanding as companies and infrastructure projects seek alternatives to bank financing, which remains constrained, according to a report released on Tuesday, 8 September, by ratings agency Moody's.
The continent's private credit industry remains small in absolute terms but has recorded accelerated growth in recent years. According to the report, assets under management climbed from $1.8 billion in 2020 to $5.6 billion by the end of 2025.
Moody's said demand will continue to be underpinned by the region's persistent financing gap, the underdevelopment of capital markets, and the limited capacity and willingness of banks to extend long-term financing — particularly to infrastructure projects, mid-sized companies, and small businesses.
The report notes that, despite rapid growth in recent years, Africa accounts for just 0.3% of the global private credit market, which is valued at a minimum of $1.8 trillion.
The ratings agency said development finance institutions will remain an important source of funding for the sector across Africa and could help mobilise international capital through credit-enhancement and blended finance structures.
Such mechanisms could support highly rated senior credit transactions and increase the attractiveness of African private credit to institutional investors, including pension funds and insurance companies.
At the same time, private credit is unlikely to become a major competitor to African banks, as funds frequently rely on banks to provide or co-finance transactions, particularly in the infrastructure sector, where financing needs remain elevated.
According to Moody's, achieving meaningful scale will require the industry to demonstrate consistent and competitive returns relative to other investment opportunities — particularly given investor concerns about frontier market risks and the uneven historical performance of Africa-focused private equity funds.
The report also highlights that equity market capitalisation across the continent stood at approximately 33% of gross domestic product in 2024, well below the 61% average recorded in emerging markets and the 113% global average.
Source: Diário Económico
Original article: https://www.diarioeconomico.co.mz/2026/09/08/mundo/africa/africa-moodys-preve-forte-expansao-do-credito-privado-no-continente/
