Unlocking African potential faster

Elliot Holley

NAIROBI, Kenya – The potential of new technologies to transform financial services in Africa has long been heralded by the likes of Kenya’s M-Pesa and others. 

But services for corporates have remained relatively underserved – until now. From the sands of the Sahara in the north to the Limpopo river which marks the border with South Africa to the south, economic, political and technological changes are emerging that favor new opportunities for banks.

Excluding South Africa and the Arab-Berber countries of North Africa, the continent is home to 880 million inhabitants. Most senior financial services executives that have dealt with the region are familiar with the low penetration of bank accounts across much of the continent. They are also aware of the widespread adoption of mobile phones in virtually every country.

For example, 57 percent of the population in Uganda had a mobile phone subscription in June 2014, while in Zimbabwe the figure is 97 percent, and in Ghana in West Africa it is 110 percent , according to figures provided by the World Cellular Information Service.

However, what is less known is the increasing impact of the technology on the corporate side – affecting not just individual consumers, but companies, institutions and even governments.

Giant US corporation Cargill is a good example of the new wave of African corporate investors. The company is active across Africa purchasing and distributing grain and other agricultural products, trading in energy, steel and transport, and raising livestock and producing feed, producing food ingredients, for processed foods and industrial use. It also has a large financial services arm which manages financial risks in the commodity markets. Cargill is currently working with Barclays to disburse payments such as salaries and grants to its employees, clients and customers through mobile networks in several African countries, including Cameroon, Côte d’Ivoire, Ghana, Kenya, Malawi, Nigeria, Tanzania, Zimbabwe and Zambia.

“Regulators have helped by having clear guidelines in place, and it is an open environment, meaning that authorities are often open to new players that may not be the traditional banks,” said John Owens, senior policy adviser, digital financial services and financial inclusion policies at the Alliance for Financial Inclusion.

This story was originally published in East African Business Week. Click here to read the entire article.

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