‘Buy Now Pay Later’ market to hit $10.6bn – Report

The ‘Buy Now, Pay Later’ market in Nigeria, Kenya, and other African countries is expanding rapidly, a new report on this segment of the economy has indicated.

It was also noted that the BNPL market in Africa is projected to hit N10.63bn by the end of this decade.

This was revealed in a recent report from data company Research and Markets titled ‘Africa Buy Now Pay Later Business and Investment Opportunities Databook.’

Investopedia described BNPL as a type of short-term financing that allows consumers to make purchases and pay for them over time. It ties into the consumer credit culture that the Federal Government has been pushing through the Nigerian Consumer Credit Corporation, which it says can boost the economy by driving consumption.

“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,” part of the report read.

In Nigeria, the report revealed that in May 2024, Jumia Nigeria launched BNPL partnerships with Easybuy and CredPal, allowing consumers to make purchases and spread payments over time. This also showed the increasing incorporation of the BNPL options in e-commerce platforms in Africa to attract more customers.

Earlier, Mastercard partnered with Lipa Later to expand BNPL solutions in Kenya, Rwanda, Uganda, and Nigeria, aiming to enhance financial inclusion.

The report further read, “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.”

Meanwhile, it was stated that the Central Bank of Nigeria introduced stricter guidelines for digital lenders, including rules to protect consumers and limit excessive debt accumulation. These guidelines now extend to BNPL providers operating in the country.

On the outlook for the next two to four years, Research and Markets stated, “Existing players will likely expand their geographic presence and diversify their product offerings to gain a competitive edge. Market consolidation through partnerships and acquisitions is anticipated as providers seek to scale operations and achieve economies of scale.

“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.”