15th November 2022

In a Giffy by TechCabal Insights header image

Hi there,

Welcome back to In A Giffy—the newsletter by TechCabal Insights that helps you make sense of Africa’s digital economy in a single chart. Please click on display images to view the chart on your mobile device.

In case you missed it, you can read the first edition here where we talked about the growth of ecommerce on the African continent and how to take advantage of it. Today’s newsletter focuses on a fast growing fintech sub-sector, consumer credit aka Buy Now Pay Later.

If you have ideas or feedback, kindly share with us at tcinewsletters@bigcabal.com, we’d love to hear from you.

Now, let’s dive in.

by Mobolaji Adebayo

Chart of the Week

With an estimated $7.1 billion market size and rising investor interest, Africa’s buy now pay later (BNPL) industry is growing quickly. BNPL’s payment adoption is expected to grow steadily between 2022 and 2028, recording a CAGR of 36.1%.

Similarly, gross merchandise value will increase from $7.4 billion in 2021 to reach $82.9 billion by 2028- over 1000% growth in seven years.

Chart showing BNPL market size of selected AFrican countries in 2021 and 2022

Currently, access to credit remains out of the reach of many while credit card penetration across the continent remains low. For instance, South Africa has one of the most advanced credit systems on the continent. Yet, its credit card penetration is below 10%.This presents an opportunity for BNPL startups to innovate.

So how can BNPL executives achieve high user growth and maintain low default rates?

BNPL startups are growing rapidly on the continent. Robust KYC processes, data sharing, and a focus on customer experience will determine those who win in the long run.

Our presentation on Buy Now Pay Later in Africa contains relevant industry insights. Download here

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