How Marketplace Lending affects debt markets across Sub-Saharan Africa

Jun 9, 2017 Blog  Debt Markets , Marketplace Lending


“Financial/Capital markets across sub-Saharan Africa (SSA) are underdeveloped and therefore businesses (SMEs and Corporates) lack access to finance. The historical over-reliance and easy access to concessional financing in the form of loans and or grants aligned to debt relief under the Heavily Indebted Poor Countries (HIPC) Initiative, from international development institutions the likes of the International Monetary Fund, The World Bank, etc. has resulted in shallow capital markets, characterised by lack of infrastructure to effectively deploy domestic capital as an alternative source of financing.

Despite a growing need for development finance across SSA (excl. South Africa) capital markets have remained shallow, illiquid and inefficient. In the aftermath of the global financial crisis (2008), concerns have emerged that concessionary finance will become scarcer as a result of the increasing demand and attractive return-on-capital profiles of other developing markets. Scarcity is likely to be exacerbated further given the fiscal challenges being faced by international capital markets (Western), which constrain economic [as opposed to development] capital flows to a small number of qualifying African countries.”

This extract is from an article written by Altesh Baijoo which you can read here.



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