The e-commerce sector of Africa is experiencing an increase in Renaissance. In 2025, Africa retail e-commerce is expected to be more than $ 39 billion, and in 2029 seized $ 55 billion and modern fashion labels and international demand and directly to ambitious brands. These businesses use digital trade and modern payment rails to reach more customers than before. E-commerce also arises as a critical goal to help enterprise economic blows and unlock trade potential of the African Continental Free Trade (AFCFTA).
Again, a critical obstacle threatens to limit their growth: access to affordable, flexible credit.
Medium-based e-commerce enterprises, those outside micro-entrepreneurship, but still big corporations face a unique funding problem. These businesses are very large for microfinance, but often very risky for very small or traditional commercial banking. Despite sustainable sale, loyal customers and growing brand capital, it fights to invest in technology to expand the production of production, expanding the logistics or serve a larger market.
Sub-Saharan Financing for Africa has exceeded 331 billion dollars with medium-sized consumer enterprises in the heaviest shot. Usaid and ETRADE, Kenya, Nigeria and South Africa (MSME) show that these enterprises are one of the greatest obstacles to expand and finance e-commerce opportunities and financing the Internet connection.
For example, consider a medium-sized Nairobi fashion retailer who is a medium-sized Nairobi fashion retailer trying to finance improved packaging and marketing to achieve recipients in front of an online store. Despite consistent sales, traditional lending, they reassured cash flows as unexpected, because they could not give credit to acceptable conditions. Cases like this are widespread.
As expanded by Africa’s mid-layer, about 212 million people are expected to reach the status of average income and consumer expenditures in 2025, e-commerce requirements are expected to increase. However, the intensive credit entry can prevent the growth of the supply. Growing brands cannot be expanded to expand inventory, strengthen logistics or provide a loan to build a new supplier partnership, better, better capitalized competitors. These missed opportunities ripple through the technological partners depending on ecosystems and effective suppliers, logistics firms and developing e-commerce sectors.
4 What you need to improve
Credit is not a luxury for these businesses. It is important to turn local brands into long-term economic engines with global ambitions. It can do by following four principles.
- Smarter credit assessment. The information hinders the financing of a small and medium enterprise (SME) in Africa asymmetry; There are no official financial records and credit history of many small enterprises. This requires a high pledge to require trash in traditional lenders. To overcome this, loans must use real-time transactions (eg e-commerce sales, inventory, inventory, customers’ feedback.
- Data exchange partnership. Payment providers, marketplaces, distributors and banks must cooperate to share operational dates and share the supply chain data and help lenders assess the risks with confidence.
- Mixed financial and risk exchange opportunities. Social-private tools like the African Warranty Foundation and Industrial Bank. This reduces the risks of loaners and helps reduce the value of the loan.
- Target financing for digital transformation. As an union of ETRADE Development Research, many MSMES wants to invest in a better internet connection, digital marketing and performance abilities, but cannot provide favorable loans for these updates. New financing products in accordance with e-commerce will open the growth potential.
The opportunity for the upcoming
Governments and the private sector should develop e-commerce policy frameworks, and prioritize simpler customs procedures, improve the border payments and improve digital identification systems, increase the start of the agenda.
Payments are a foundation, but credit is a growth driver. We must build financial means of competing in a larger, scale-scale, scale, scale and global scale of Africa’s most ambitious entrepreneurs. Africa grows when you grow up.
Olugbenga GB Agboola is the founder and CEO of Foundterwave.