09/09/2025
The need for effective African credit bureaus.
A lot of people in my country Zimbabwe are quite proud that it is a cash economy and whatever people have, they own outright. The problem with the cash economy unfortunately also means the majority are poor and have little or no prospects to turn their fortunes around. Many who have the cash, have had to resort to nefarious means to purchase big ticket items as no economy can have a lot of people being able to generate large sums of funds at will. Add to this, Africa has the largest growing youth population in the world, this demographic has little hope of securing anything for themselves.
To grow any commercial activity at scale, access to credit is key. This allows the buyer and the supplier to both do more than if it was just a cash transaction. Youth can take a first step to finding their financial feet using small amounts of credit. Credit smoothes the engine of commerce and allows for individuals and businesses to do more further fueling the cycle.
However, without financial visibility of all parts of the economy, funding becomes a problem. This is due to the fact that providers of capital have no way to assess risk and have leverage to recover their money as borrowers have no financial track records that can be verified. Hence the importance and need for credit bureaus. But not just any credit bureau, Africa needs unique bureaus which can show financial track records of the ‘informal’ sector that makes a large part of commercial activity in Africa.
