Private credit in Africa reaches $5.6 billion at end-2025

Private credit in Africa reached $5.6 billion at end-2025, a small base Moody’s says could expand through pooled loan structures.

The market more than tripled over five years, according to the Moody’s report, but still accounted for only 0.3% of the $1.8 trillion global private credit market. That contrast defines the investment case: fast growth on the continent, but from a scale that remains marginal globally.

Africa’s $5.6 billion base

Private credit refers to lending by investment funds and other non-bank investors rather than traditional banks. Globally, the asset class has grown as borrowers look beyond regulated lenders and investors seek income from directly negotiated loans.

In Africa, Moody’s frames the opportunity less as a simple rise in direct lending and more as a test of whether risk can be packaged for larger institutions. Pension funds, insurers and other global investors often require clearer protections before committing capital to less liquid markets.

Pooled loans shift risk

The report’s central mechanism is pooling African loans and separating risk across different layers of capital. Development-finance institutions could take on part of the exposure, leaving senior portions of the pool with a risk profile that may suit more conservative investors.

If that structure holds, the effect would be to turn scattered loans into investable portfolios with clearer loss absorption. The benefit for borrowers would be longer-term funding that banks may not provide, especially for infrastructure and companies needing capital beyond short bank balance sheets.

Moody’s said African banks face limits from government borrowing and shallow domestic savings. Those constraints matter because local banks remain central to credit supply, yet their capacity can be absorbed by sovereign debt and limited deposit bases.

Infrastructure gap sets scale

The financing need is larger than the current private credit base. The report cited an African infrastructure financing gap estimated at up to $100 billion a year, compared with the $5.6 billion in private credit outstanding at the end of 2025.

That gap makes infrastructure the clearest channel through which private credit could affect the real economy. Roads, power, logistics and digital networks typically require long-dated funding, while many banks prefer shorter maturities or lower-risk lending.

The sector effect would depend on underwriting standards and the role of development-finance institutions. If public or quasi-public lenders absorb early losses while maintaining discipline, asset managers could scale African credit strategies without taking all of the first-loss risk themselves.

Three paths for capital

If pooled structures attract pension funds and insurers, Africa’s private credit market could become a larger bridge between global savings and local infrastructure demand. The macro effect would be a broader financing channel, while borrowers would gain alternatives to bank loans and the private credit industry would add a new growth market.

If investor protections prove too narrow, the market may remain a small part of global private credit despite rapid recent growth. In that case, the continent’s financing burden would stay closer to banks and development lenders, and private funds would likely focus on smaller, selective deals.

A third path is faster expansion with uneven loan quality. That would raise the main open question in the report’s thesis: whether development-finance support can reduce risk for senior investors without weakening credit discipline across the wider African lending market.