The role of securitisation in developing capital markets in Africa

The report examines the role of securitisation in developing African capital markets, noting that while South Africa has a mature market, other sub-Saharan regions remain nascent. It identifies significant barriers, including fragmented legal and tax frameworks, a lack of a 'ratings culture', and limited understanding among financial institutions. Despite these challenges, the study finds a substantial supply of securitisable assets in banking, microfinance, and fintech sectors. It recommends a holistic regulatory approach, the use of anchor investors from DFIs and MDBs, and the adoption of scalable structures like warehouse facilities to mobilise private capital and bridge the private credit gap.

• South Africa is the continent's most advanced and dominant securitisation market, whereas activity in other sub-Saharan African countries has been limited and often led by non-financial originators.
• A critical barrier to market growth is the lack of a holistic regulatory environment; simply having a basic securitisation framework is insufficient if it is not integrated with tax neutrality, asset transfer laws, and banking regulations.
• There is a significant lack of reliable, standardised data on securitisation activity in Africa, which hinders investor ability to price risk and impedes overall market development.
• Financial institutions in Africa are slow to adopt securitisation due to a lack of understanding of its benefits, a preference for low-risk sovereign debt, and perceptions of the process as too complex and costly.
• The potential supply of bank private credit assets available for securitisation in sub-Saharan Africa (excluding South Africa) is estimated at approximately $63.3 billion, which reduces to $57 billion after adjusting for non-performing loans (NPLs).
• Digital lenders and fintechs represent a significant potential source of securitisable assets due to their sophisticated data tracking and rapid growth, with revenues projected to exceed $150 billion by 2025.
• Institutional investors, particularly pension funds and insurance companies, have a high allocation to government securities (40-60% of AUM), which crowds out investment in private debt and securitisation products.
• Development Finance Institutions (DFIs) and Multilateral Development Banks (MDBs) are essential as 'champions' to de-risk early transactions, provide technical assistance, and act as anchor investors to crowd in private capital.
• 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.
• Alternative structures, such as warehouse facilities and master trusts, are recommended to overcome challenges related to scalability and high transaction costs for smaller originators.

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} }