Recognising the opportunities that Africa’s burgeoning middle class presents, an increasing number of financial institutions have awoken to the massive potential that lies within Africa’s growing consumer base. To do so, however, institutions will continually need to embrace innovative strategies so as to shape banking products to fit consumers’ rising financial sophistication needs, as well as to tap into the continent’s massive ‘unbanked’ population; much of which could be well be beyond the realm of ‘traditional banking products’ per se. While not without challenges, Africa’s financial services sector presents compelling opportunities.
Key conclusions from the report include:
- Development of Africa’s banking and finance sector has the potential to transform the lives of millions across the continent.
- The successful expansion of financial services to include the lower income and ‘unbanked’ sectors
of the population has the ability to provide jobs, create safety networks, and ultimately have a hand in reducing poverty.
- Private equity is experiencing a boom as the perceived risks of investing on the continent decline and as global liquidities seek profitable opportunities elsewhere than in depressed developed markets.
- Most African countries lag the rest of the world in terms of insurance, creating substantial scope for future development, which in turn offers profitable opportunities for insurers that are willing to take on some risk and are able to be innovative, as their success will depend on their ability to devise new ways to approach insurance in a continent that is a bit different to the rest of the world.