The role of securitisation in developing capital markets in Africa

This report by FSD Africa, BII, and Copernican Securities examines the potential for securitisation to deepen capital markets in sub-Saharan Africa. It identifies a significant private credit gap and argues that while South Africa has a mature market, other African nations face substantial regulatory, legal, and capacity barriers. The report recommends a holistic approach to regulatory reform, increased technical assistance from MDBs and DFIs, and the adoption of standardised data reporting to attract institutional investors.

• South Africa is the dominant and most advanced securitisation market on the continent, while activity in other sub-Saharan African countries remains limited and nascent.
• A critical barrier to market growth is the lack of reliable, comprehensive data on securitisation activity in the region, which hinders the ability of investors to price risk effectively.
• The report concludes that simply having a basic securitisation regulatory framework is insufficient; a 'holistic' approach is required that integrates capital markets laws with tax neutrality, banking regulations, and asset transfer laws.
• Tax neutrality is a fundamental requirement for securitisation, yet it remains a major challenge in many African countries, where uncertainty around VAT, stamp duty, and capital gains tax creates barriers.
• There is a significant supply of securitisable assets, but African banks often prioritise low-risk sovereign securities over private sector lending, creating a 'crowding out' effect that limits the pool of available private credit assets.
• Non-bank financial institutions, including microfinance institutions (MFIs) and digital lenders, show higher willingness to innovate with securitisation than traditional banks, though they often face scalability and cost issues.
• Institutional investors, such as pension funds and insurance companies, are often deterred by a lack of credit ratings, internal asset allocation limits, and a preference for government securities.
• The report identifies Kenya, Ghana, Rwanda, Tanzania, Nigeria, and the WAEMU region as priority markets for intervention based on their existing strengths and potential for growth.
• Multilateral Development Banks (MDBs) and Development Finance Institutions (DFIs) are essential as 'champions' to de-risk early transactions, provide technical assistance, and act as anchor investors to crowd in private capital.
• Digital lenders and fintechs represent a significant potential source of securitisable assets due to their use of sophisticated data analytics and credit scoring, which improves transaction reporting.

APA

FSD Africa (2025). The role of securitisation in developing capital markets in Africa. https://fsdafrica.org/wp-content/uploads/2025/10/The-role-of-securitisation-in-developing-capital-markets-in-Africa-BII-and-FSD-Africa.pdf

Chicago

FSD Africa. The role of securitisation in developing capital markets in Africa. 2025. https://fsdafrica.org/wp-content/uploads/2025/10/The-role-of-securitisation-in-developing-capital-markets-in-Africa-BII-and-FSD-Africa.pdf.

Wikipedia

{{cite report |author=FSD Africa |title=The role of securitisation in developing capital markets in Africa |date=October 2025 |url=https://fsdafrica.org/wp-content/uploads/2025/10/The-role-of-securitisation-in-developing-capital-markets-in-Africa-BII-and-FSD-Africa.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{fsdafrica2025role, author = {{FSD Africa}}, title = {{The role of securitisation in developing capital markets in Africa}}, institution = {FSD Africa}, year = {2025}, month = oct, url = {https://fsdafrica.org/wp-content/uploads/2025/10/The-role-of-securitisation-in-developing-capital-markets-in-Africa-BII-and-FSD-Africa.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }