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Owning Bitcoin and Solana no longer means selling them when cash runs out. Across Africa, digital asset startups are borrowing another idea from traditional finance: lending to consumers who are crypto-rich but cash-poor.

Crypto-backed loans, a form of lending tied to cryptocurrencies, allow users to obtain credit—in fiat, stablecoins, or other digital assets—by pledging their crypto holdings to these startups. It is a form of lending that is gaining momentum in Africa’s largest crypto markets, including Nigeria and South Africa.

In January, Busha, a Nigerian fintech startup that allows users to buy and sell digital assets and pay bills, launched crypto-backed loans as an additional product to its stack. The product offers up to 50% loan-to-value (LTV), allowing users to borrow up to half the value of their Bitcoin and Solana holdings and access the loans in Naira. Busha said it charges a 2% monthly interest.

Busha is one of several African startups offering crypto-backed loans. The emerging product, which borrows some features from the traditional finance sector where lending is a profit centre, could expand core services to crypto users that are overlooked in the broader secured lending market.

It could signal a maturing crypto market, especially if the startups are actually deploying their own capital into loans, rather than simply intermediating and sourcing liquidity from other global lending protocols, such as US-based Morpho. But as some African crypto lenders target the broader mass market, they face a bigger challenge: expanding the product beyond people who already hold crypto.

John Babodor, the African lead for Blend, a US-based startup that provides infrastructure to enable businesses to offer stablecoin yield, said that since the start of the year, he has received between $2,000 and $5,000 in crypto-backed credit from global lending platforms, including Aave, Kamino Finance, Hyperlend, MarginFi, Hyperliquid, and HypurrFi.

“I use crypto-backed loans to avoid selling my volatile assets like Bitcoin, Ether, Solana, and the $HYPE token,” Babodor told TechCabal. “For example, I deposited ETH into Aave and borrowed stablecoins against it. I then used those [stablecoins] to pursue additional yield opportunities, trade, buy meme coins, and occasionally off-ramp [withdraw] funds when needed. At one point, I had more than $5,000 worth of ETH deployed in this strategy.”

Crypto-backed loans are digital products originally built for digital asset traders. But Olayinka Omoniyi, co-founder of Monierate, a currency price-tracking platform, sees a larger market beyond traders.

Unlike Babodor, who prefers borrowing stablecoins and other digital assets, Omoniyi prefers borrowing in Naira. He said he regularly uses global exchange Binance or Bitmonie—a crypto-backed lending product he co-founded—to access liquidity without selling his Bitcoin holdings.

“If most of my income is in Naira, it makes sense for me to borrow in Naira,” he said. “You don’t want FX [foreign exchange] volatility becoming another problem when you’re trying to repay.”

The contrast between the two users captures a question at the centre of Africa’s emerging crypto credit market: is crypto-backed lending primarily a trading tool, or can it become a mainstream credit product?

That question reflects a broader opportunity.

While crypto-backed lending remains nascent in Africa, Galaxy Research, a US-based crypto research firm, estimated that the global crypto-collateralised lending market stood at $67.4 billion in outstanding loans at the end of Q1 2026, after reaching a record $78.7 billion in Q3 2025 before pulling back amid market volatility.

As more Africans accumulate Bitcoin and other cryptocurrencies, startups are building lending products that let users unlock liquidity without selling their assets, filling a gap left by traditional banks, which generally do not accept digital assets as collateral.

The startups building Africa’s crypto lending market

Nigeria is beginning to emerge as a market for crypto-backed lending.

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