The fast-growing installment payment market is set to expand sharply across the continent, even as stricter licensing and compliance rules reshape competition and put pressure on smaller fintech firms.

Africa's buy now, pay later (BNPL) market is expected to grow from $5.2 billion in 2025 to $16.8 billion in 2031, according to a report published on January 29, 2026, by market research firm Research and Markets.

The report, titled "Africa Buy Now Pay Later Business and Investment Opportunities Databook," said the market posted an average annual growth rate of 30.5% between 2022 and 2025. That upward trajectory is expected to continue, with average annual growth projected at 20.7% between 2026 and 2031.

Across the continent, BNPL remains a fragmented credit segment, though it is becoming increasingly regulated and shaped by e-commerce platforms, mobile payment ecosystems, and specialized fintechs.

South Africa, Kenya, Nigeria, and Egypt account for most of the activity, each with distinct competitive dynamics. In South Africa, BNPL is primarily integrated into established e-commerce networks and physical retail stores. In Kenya and Nigeria, mobile money services and super apps (digital platforms that centralize multiple services such as messaging, payments, e-commerce, transport, and delivery) are driving adoption.

Several categories of players operate in Africa’s BNPL market. Regional fintechs such as Payflex (South Africa), Lipa Later and Faraja/EDOMx (Kenya), valU (Egypt), and CredPal (Nigeria) remain central to the sector.

E-commerce platforms, particularly Jumia, are increasingly integrating BNPL through partnerships with specialized fintechs. In Nigeria, Jumia partnered with Easybuy and CredPal in May 2024 to offer installment payments at checkout, allowing customers to spread payments while ensuring merchants receive funds immediately. In South Africa, Payflex reports growing adoption among online and offline retailers, making BNPL a standard option alongside credit cards and electronic transfers, particularly in the fashion and electronics sectors.

Regulations favoring better-capitalized players

Mobile money-based models such as M-PESA Faraja are expanding access among offline merchants. Telecom operators, leveraging large customer bases, are also offering BNPL products that extend beyond e-commerce to everyday spending and access to assets such as smartphones, telecom services, and off-grid solar systems.

Banks, credit card providers, and some e-commerce platforms are entering the market through partnerships rather than developing proprietary BNPL solutions. Mastercard’s multi-market collaboration with Lipa Later and Jumia’s recent partnerships with several consumer credit providers illustrate this partnership-driven expansion, rather than the launch of standalone fintech ventures.

New entrants are expanding into high-potential sectors such as education and healthcare, seeking to differentiate themselves and position in less competitive niches.

The report notes that regulators are extending consumer credit frameworks applicable to digital loans to cover BNPL products, with an emphasis on licensing, disclosure, and financial inclusion. BNPL providers are increasingly subject to rules similar to those governing other consumer credit institutions, particularly regarding creditworthiness assessments, standardized disclosures, complaint handling, and data-sharing obligations.

As a result, compliance and capital costs are expected to rise, favoring well-capitalized players and bank-backed models, while smaller or weakly capitalized fintechs may disappear, consolidate, or pivot toward technology-service roles. This is likely to result in fewer licensed providers, clearer risk controls, and closer partnerships with banks, insurers, and credit bureaus.

Tightening regulations in Kenya (a requirement for all loan providers to obtain a Central Bank license), Nigeria (compliance with Federal Competition and Consumer Protection Commission requirements for digital lending), and Egypt (licensing by the Financial Regulatory Authority) have already raised entry barriers, shifting competition toward underwriting standards, compliance capacity, and distribution partnerships.

Walid Kéfi