According to a recent report from data company Research and Markets titled “Africa Buy Now Pay Later Business and Investment Opportunities Databook,” the “Buy now, pay later” (BNPL) market in Africa is expected to reach N10.63 billion by the end of this decade.
Investopedia defined BNPL as a form of short-term financing that enables consumers to make purchases and pay for them over time. It is linked to the consumer credit culture that the Federal Government has been promoting through the Nigerian Consumer Credit Corporation (CREDICORP), which it claims can stimulate the economy by encouraging consumption.
The report available to BrandSpur national news stories partly reads: “The BNPL market in the region experienced robust growth during 2021-2024, achieving a CAGR of 29.4 per cent. This upward trajectory is expected to continue, with the market forecast to grow at a CAGR of 14.8 per cent during 2025-2030. By the end of 2030, the BNPL sector is projected to expand from its 2024 value of $4.48bn to approximately $10.63bn.
“The BNPL sector in Africa has experienced significant growth, driven by strategic partnerships, integration into e-commerce platforms, and expansion into various sectors. While specific regulatory changes have yet to be widely reported, the overall growth of BNPL services is driven by increasing consumer demand for credit solutions, particularly among the unbanked population. Over the next two to four years, the BNPL landscape is expected to evolve, with continued expansion and the potential development of regulatory frameworks to ensure sustainable growth,” it added.
According to the report, to increase financial inclusion, Mastercard partnered with Lipa Later to expand BNPL solutions in Kenya, Rwanda, Uganda, and Nigeria.
In May 2024, Jumia Nigeria launched BNPL partnerships with Easybuy and CredPal, enabling customers to make purchases and spread payments over time. This also demonstrated the growing incorporation of BNPL options in African e-commerce platforms.
Continuing, the report revealed: “The increasing demand for flexible payment options among consumers. The need to enhance financial inclusion by providing credit access to underbanked populations. This trend is expected to continue over the next two to four years, with more partnerships and service expansions enhancing BNPL accessibility across the continent.
“Africa’s BNPL market has seen increased competition, driven by service expansions, strategic partnerships, and regulatory changes aimed at protecting consumers. Over the next two to four years, the sector is poised for further growth, with heightened competitive intensity and greater emphasis on compliance. Providers that invest in technology, innovation, and partnerships will be better positioned to navigate the dynamic market and capitalise on emerging opportunities,” it added.
According to reports, the Central Bank of Nigeria (CBN) has tightened regulations for online lenders, limiting excessive debt growth and protecting clients. Now, BNPL providers doing business in the nation are subject to these rules.
According to Research and Markets, to obtain a competitive advantage, existing players will likely expand their geographic presence and diversify their product offerings over the next two to four years. As providers look to expand their operations and realise economies of scale, market consolidation through partnerships and acquisitions is expected.
The research, however, stated: “Investments in technology, particularly AI for credit risk assessment and customer insights, are expected to improve personalisation and service delivery. Regulatory frameworks will continue to evolve, focusing on protecting consumers while fostering fintech innovation. Compliance with local regulations will become critical for both market entry and sustainability, prompting providers to prioritise transparent practices and responsible lending.”
