Credit on the Cusp: Strengthening Credit Markets for Upward Mobility in Africa

How credit can help support the emergence of a middle class

African economies are currently undergoing dramatic changes, not the least of which is a changing consumer base. Absolute poverty is reducing as a new class of consumer—the cusp group—emerges. This group, now accounting for 23% of sub-Saharan Africa’s population, gets by on USD 2-5 per day, are active earners and are straddling the formal and informal worlds. For this group, healthy credit markets could expand opportunity and enable upward mobility, helping to build a true middle class. But, for this to happen, credit needs to expand and to do so in healthy ways.

After taking a deep look at the experiences of cusp group borrowers and the lenders who serve them in Ghana, Kenya, and South Africa, this research concludes that donors and policymakers ought to take an active role in enabling cusper credit markets to open in a healthy way, seizing a once-in-a-generation opportunity to leverage financial markets for upward mobility.

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