No credit today💳
#194: “A bank is a place that will lend you money if you can prove that you don’t need it.” - Bob Hope.
Hello Venturer,
If you’ve ever walked into an African corner shop to buy anything, chances are that you’ve seen a “No credit today” sign boldly displayed. Some of them even get creative with it, e.g. the picture above.
Why does this happen? Well, trust is rare in many places. So, the only people these traders would sell on credit to are people who have earned that trust by becoming regular customers. No one wants bad debt.
This mindset is the same in financial institutions. Their core business model is to lend out money. Yet most African businesses have never received a bank loan. Most bank account holders have never used a credit card either. The “No credit today” phrase, quite literally, describes our economy.
Several innovations later, this problem hasn’t exactly softened. So, this week, we looked into what makes Africa’s credit problem stubborn.
Oluwatosin Ogunjuyigbe,
Staff writer, Ventures Africa.
What’s new?
Africa has a stubborn credit problem. Here’s why.
As of 2023, the world’s debt hit a record $307 trillion. However, credit is a luxury in Africa, with most people unable to access debt. Read more.
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