Information (ICT) Archives - African Financial & Economic Data

29 Aug

Automotive outlook for Africa: Bumpy roads ahead?

The author, Richard Li, is a Singapore-based partner with Steel Advisory Partners, a management consulting firm that serves clients across industries. This article was produced for the NTU-SBF Centre for African Studies, a trilateral platform for government, business and academia to promote knowledge and expertise on Africa, established by Nanyang Technological University and the Singapore Business Federation.

In 2000, the overall African gross domestic product (GDP) was US$616bn. Since then, the continent has enjoyed a period of high economic growth and its GDP has risen massively by 245% to reach $2.1tn in 2016. Moreover, the World Bank recently started classifying countries according to their gross national income (GNI) and there are in fact 25 African countries that are in the middle income category in 2016.

To further sustain economic growth in Africa, there is a significant need for the transportation of goods and people. This means that there will be an accelerating demand for automotive vehicles in Africa, particularly in those middle-income countries that have a huge population mass, as well as a relatively high growth rate.

Africa, the last frontier market for automotive

According to the International Organisation of Motor Vehicle Manufacturers, there are only 44.8 million vehicles in Africa, representing only 3.5% of the global market. For Africa, with its population of about 1.2 billion, there were only 42 vehicles per 1,000 inhabitants in 2015. Compared to the global average, Africa is about 4.3 times less. This signals that there is an immense upside for market penetration in the automotive sector. Moreover, between 2014 and 2015, the automotive market in Africa grew at a relatively fast pace of 5.8%, compared to 1.9% and 2.4% for Europe and the United States respectively.

In terms of sales, in 2016, there were about 1.3 million vehicles sold in Africa, representing only 1.4% of the global market. The market is mainly dominated by two regions – Northern Africa and South Africa – with an 85% market share. South Africa sold about 547,000 vehicles, whereas for the Maghreb countries – Algeria, Morocco and Tunisia – together with Egypt, 575,000 vehicles were sold.

As for manufacturing capabilities,there is a lot of room for improvement, since Africa produces slightly less than 1% of all the vehicles in the world. Although South Africa has the biggest production capability with nearly 600,000 vehicles produced in 2016, manufacturing is stalling and is on a decline. Morocco is next with a capacity for 345,000 vehicles. These two countries represent about 91% of all vehicles manufactured in Africa. With increasing demand in other parts of Africa and with only small assembly facilities elsewhere, there are indeed many potential opportunities for automotive companies to further tap.

Challenges faced by the automotive sector

Africa is definitely not an easy market to deal with. The continent is not only geographically vast, but it is also a very fragmented market with 54 independent countries, each with their own market characteristics. In addition, since many African countries are still in the process of development, there is a dire lack of clarity in terms of soft infrastructure, such as proper regulatory frameworks, as well as economic policies for the development of industries.

The automotive sector is a capital-intensive industry that requires a long cycle for its development and for returns on its initial investments. On top of that, the captive market within specific countries may be too small to justify large-scale production facilities. Besides the lack of clear guidelines to attract investors in the automotive sector, the political instability in many African countries increases risk, thereby stifling and eventually halting the development of automotive manufacturing.

South Africa was the only African country that had been able to realise all the conditions needed for manufacturing automotive vehicles. With its population of nearly 56 million and a GNI per capita of $5,480, South Africa is the biggest automotive market in Africa – in terms of both production and sales of new vehicles. However, the recent political instability in South Africa is making global automotive companies think twice about whether they should invest further in the country. As a result of this inertia to reform and stimulate this sector, automotive companies may decelerate their future development plans there.

The Maghreb countries leading the way

The three Maghreb countries – Algeria, Morocco and Tunisia – are progressively focusing on boosting their automotive sector. Morocco has been the most successful, attracting French car manufacturers with the development of special industrial and economic zones. Renault and PSA Peugeot Citroën have committed €1.6bn ($1.9bn) and €600m ($705.7m) for their own production facilities respectively.

The Moroccan government is definitely steering the automotive industry in the right direction with the necessary framework and conducive environment needed for its development within the country. Morocco is pushing hard for the industry to rally further, aiming to produce one million vehicles by 2020. By then, its automotive exports will represent $10bn worth of vehicles to Europe and other parts of Africa. This sector will eventually represent 20% of the Moroccan GDP and create 160,000 jobs locally.

Algeria and Tunisia are also locations where French car manufacturers are setting up assembly plants. Germany’s Volkswagen is opening its plant in Algeria as well. With their close proximity to Europe, coupled with the right incentives and regulatory framework, European car manufacturers are finding it very appealing to be in these countries. Moreover, with a captive market of more than 87 million people among these three countries, selling locally helps to justify the necessary investments as well.

Potential opportunities in Africa

Africa can offer great opportunities to automotive companies, since more countries are slowly but steadily becoming more affluent. According to data from the World Bank, there were 12 countries in 2000 that might be considered as middle-income countries. Nowadays there are 25 middle-income countries across the continent. This represents a potential market size of approximately 656 million people. From 2006 until 2016, some of the countries that have significantly raised their GNI per capita are Ethiopia, Nigeria, Egypt, Kenya and Ghana, with an increase of 267%, 188%, 166%, 134% and 130% respectively.

Besides South Africa, the other top five most-attractive middle-income countries that have big populations, are Algeria, Egypt, Kenya, Morocco and Nigeria. These are probably the most promising markets since they have a combined population size of about 462 million, with a significant percentage being able to afford their own vehicles. The automotive industry can potentially crank and rev the growth engine of these countries further.

The African marketplace is gradually looking more attractive with the continent potentially being able to absorb many more vehicles than what it does currently. However, there are many obstacles that first need to be overcome. And African governments have to be committed to provide the right conditions for the automotive sector to flourish within their countries. With the right framework, this industry can not only be lucrative for the automotive companies, but at the same time, it can turbocharge the economic growth of African countries.

Richard Li is a Singapore-based Partner with Steel Advisory Partners, a management consulting firm that serves clients across industries. Having spent his working career in strategy consulting, he worked with various global clients and covers themes such as Corporate Strategy, Transformation, Digital Innovation and Risk Management. He can be contacted via the Steel Advisory Partners site. This article was specifically written for the NTU-SBF Centre for African Studies.

source from how we made it in Africa

29 Aug

Venture capital investment in Africa: Where the IFC is betting its money

The International Finance Corporation’s (IFC) Venture Capital arm invests in growth-stage companies that offer innovative technologies or business models geared at emerging markets. Olawale Ayeni is regional head for Africa investments at IFC Venture Capital. How we made it in Africa asked him about investment opportunities in the continent and how local start-ups compare to their global peers.

Is it true that the IFC wants to double the value of its venture capital (VC) portfolio to US$1bn by 2018?

I don’t want to go into numbers, but I can say that the IFC will focus on being more aggressive with the venture asset class, particular in frontier markets. The size of the team has increased and we are looking at [more deals on the continent]. We are not just increasing for the sake of it. It is about using equity to really unlock markets… and actually create new markets. It’s more around us trying to push the envelope in Africa to do more.

Any specific sectors or countries where you see potential investments coming from?

Basically we are looking for high-growth businesses that can use technology to enable their ability to scale rapidly. Within Africa there are both large and small markets – but we focus on all of them, as long as the potential to scale rapidly is there. The total addressable market has to be big enough for venture capital to participate.

We look at a bunch of sectors too – but mostly tech and tech-enabled businesses… We spend a lot of time looking at consumer internet technology, such as e-commerce and e-logistics platforms. Consumer internet as a sector is quite broad, but we focus on it a lot. We also focus on education technology. We actually have an investment in a company called Andela, which has done quite well. It was started in Nigeria, then [expanded to] Kenya and has recently launched in Uganda.

We are also focused on health tech, fintech and clean tech. Mobisol is one of our portfolio companies within [clean tech].

In addition to all of this, we also focus on frontier tech. Frontier tech refers to businesses using new technology solutions like artificial intelligence and machine learning – which are coming up in the world. We see an opportunity to apply these technologies to African problems today.

Which of the IFC’s current African VC investments are looking particularly promising in terms of potential returns?

We believe most of our investments are doing well, and that is why we invested in them. We have had some exits which have been good. I think the bottom line of your question, which I will address, is whether you can get high returns in Africa. I fundamentally believe you can get high returns in Africa and the way you get them is to fully understand the opportunity and then source the right team to address a very large problem.

If you are successful there are various ways you can exit – from trade sales (which is very prominent on the continent) to merger and acquisitions (M&As). In Africa, if you are able to scale quickly and solve a large problem, the chances are actually quite high that it will become the only solution available. And once you become the company which everyone goes to, you have a lot of pricing power and value to bring to the table.

In terms of [high-return] sectors, it is still broad. We see a lot in the over-the-top (OTT) sector where people are leveraging the mobile connectivity that has been growing rapidly in Africa for the past seven years. People are building digital infrastructure around that with a lot being quite profitable. We also [see the same] in the e-logistics space, which is fundamentally trying to solve Africa’s supply chain problem. About 80-90% of the retail market in Africa is informal, and the supply chain is very haphazard. So a lot of people are using technology to really disrupt the informal supply chain.

And then there is the education tech space. Africa is a young continent and there are a bunch of players that are leveraging the ability of young people to adapt to technology quickly, and then provide that talent to a global audience. Andela is an example of that and doing quite well. Another example in this space is GetSmarter in South Africa, although it is not one of IFC’s investments. It just got acquired for over $100m. That is an example of a successful exit in Africa.

I could go on and on about different sectors but the overriding notion is that it is all about opportunity at the end of the day, and having the right team to design solutions to solve very big problems in a large market – and tech can be used as a turbocharger for scale.

In your opinion, how do African start-ups in general compare to those in other part of the world?

Start-ups are always different all over the world… But with looking at how entrepreneurs should approach opportunities, the advice I would like to give is that African start-ups need to have a bigger vision and dream more. In my view you are only limited by how big you can actually dream. Drawing from my experience with meeting start-ups from San Francisco, their vision is very big. If you ask what their vision is, they always start with saying they want to change the world.

I think African start-ups are more humble and reserved in the way they communicate their vision. That is the difference I see. But [my advice] is that [entrepreneurs] can start with a small problem, as long as that problem is applicable to a very large market. I can’t over emphasis that enough. There are various asset classes, but for the venture asset class the size of the problem matters a lot. It needs to be big.

So this is a lesson that African start-ups can take from their peers in Silicon Valley?

Yes, from a vision and market [size] perspective, this is a lesson they can learn from Silicon Valley. But there are also lessons Silicon Valley can learn from African start-ups. In my experience African start-ups are ultimately more capital efficient, just given the nature of the capital raising and funding activities on the continent. African start-ups are actually very capital efficient from day one. So that is one lesson Silicon Valley can learn from them.

from How We Made It In Africa

14 Aug

Africa’s Working-Age Population to Grow By 450 Million in 20 Years

The working-age population in Africa is projected to grow by about 70 per cent or 450 million over a period of 20 years, spanning 2015 to 2035, said the Africa Competitiveness Report 2017. To date, Africa, which has Nigeria as one of the most populated, is inhabited by 1.246 billion people. The population had grown by about 550 million, nearly doubled to 1.2 billion over 30 years, from 1985 to 2015, and now to the current level.

The recently released ACR 2017, which was prepared by the Africa Development Bank, World Economic Forum and World Bank, noted that, going by the current trends, only about 100 million of the 450 million increased population would be able to find stable employment opportunities by 2035.

According to the report, “Countries that are able to enact policies conducive to job creation are likely to reap significant benefits from this rapid population growth. Those that fail to implement such policies are likely to suffer demographic vulnerabilities resulting from large numbers of unemployed and/or underemployed youth. New research is providing governments in the region with insights into how they can address the coming rise in the working-age populations.”

In its analysis, the ACR noted: “From 2004 to 2014, employment grew by only 1.7 percent in total–an average of less than 0.2 percent a year. This level of job creation has been barely sufficient to absorb the approximately 100 million additional African workers aged 20-59 who entered the job market in this period, which meant that the formal unemployment rate remained virtually unchanged amid continuing high rates of informal and vulnerable employment.

“Over the next decade, both GDP and the working-age population are expected to increase by about 3 percent per year. If it was possible to increase employment by only 1 per cent in the past decade, when GDP growth was higher, it could be harder to add jobs over the next few years when economic performance is expected to be softer. Looking ahead, the main question for Africa will be how to improve its competitiveness while absorbing a continuously expanding labor force in a scenario of lower growth.”

The report posited that, it was imperative for African countries to find ways to expand aggregate demand for labor and improve supply-side factors at the same time. “Beyond the traditional prescriptions–such as stable macroeconomic policy, a supportive investment climate, and improving the quality of human and physical capital–countries can facilitate more rapid and better job creation as well as accelerate the development of their manufacturing sector by implementing policies suited to their specific circumstances.”

It added: “Since almost all new jobs in Africa today are in agriculture and microenterprises, improving the business environment in these sectors is a high priority. Fragile countries can create jobs as well as promote growth and stability through targeted support to vulnerable regions and/or populations. Open trade policies and developing value chain links to extractive sectors are crucial for encouraging diversification and job creation in resource-rich countries. Finally, policies that foster regional trade and integration can be a major source of new jobs as well as improve firm-level productivity and economic competitiveness.”

Pointing out that this edition of the Africa Competitiveness Report came at a time of reduced enthusiasm about African growth prospects, the ACR expressed regret that, “The robust expansion experienced by the region over the past two decades may not continue over the next few years, reducing expectations about the continent’s employment outlook.”

“Since the publication of the last Africa Competitiveness Report in 2015, the region’s growth prospects have been affected by multiple external shocks: for example, oil exporters such as Nigeria have begun to be affected by lower oil prices over the past few years, and other mineral exporters, such as South Africa, have been hit by the slowdown of emerging economies, especially China,” the report pointed out.

Stating that, “Growth is expected to pick up in 2018 but will most likely remain below 4 per cent over the next few years,” the ACR 2017 recalled that, from 2004 to 2014, the region as a whole averaged a growth above 5 per cent a year, but it is now about 2.2 percent.

“Over that same period, growth of GDP per capita, however–the main indicator of economic development–was well above 5 per cent only between 2004 and 2007. Relatively few jobs have been added to African economies over almost 20 years of strong output expansion, mainly because of an overreliance on the primary sector (mineral extraction and agricultural products), little diversification, and low productivity,” it added.

from allAfrica

17 Mar

Orange launches its brand in Burkina Faso and strengthens its positions in West Africa

Orange will pursue its development in mobile financial services and 3.75G mobile Internet, where it was the first operator to launch and is today the uncontested leader in Burkina Faso

Orange (www.Orange.com), one of the world’s leading telecommunications operators, announces today the launch of its brand in Burkina Faso. Less than one year after the closing of the Group’s acquisition of Airtel, together with Orange Côte d’Ivoire, this announcement clearly demonstrates Orange’s ambitions for the West African market.

Orange will pursue its development in mobile financial services and 3.75G mobile Internet, where it was the first operator to launch and is today the uncontested leader in Burkina Faso. Its Orange Money solution for international transfers will be further expanded in the West African Economic and Monetary Union (UEMOA). The expansion of its optical fibre network will contribute to increasing its brand awareness as the leading provider of Internet access and connectivity to enterprises. Thanks to an ambitious network modernization plan and the strength of its parent company’s innovation capability, Orange Burkina Faso will bring an incomparable customer experience to its 6.3 million subscribers.

Bruno Mettling, Deputy Chief Executive Officer of the Orange group and Chairman and CEO of Orange MEA (Middle East and Africa), commented: “It is a great honour for the Orange group to inaugurate its presence in Burkina Faso at a time when the country is resolutely engaged in a vast economic development programme. The arrival of the Orange brand testifies to our commitment to providing the benefits of the digital ecosystem to the entire population of Burkina Faso.”

Ben Cheick Haidara, CEO of Orange in Burkina Faso, added: “Today, customers in Burkina Faso are more demanding and the way they use digital services has evolved; we are at a decisive turning point in the development of the telecoms market. Our ambition is to continue the work accomplished in recent years in the mobile money and mobile Internet fields to make Orange the leading partner for Burkina Faso’s digital transformation.”

The launch of the Orange brand in these countries is also an opportunity to welcome the men and women of Orange Burkina Faso and underline their accomplishments in their daily work to offer an incomparable customer experience.

Orange is present in 21 countries in Africa and the Middle East, where it has more than 120 million customers. With 5.2 billion euros in revenues in 2016 (12% of the total), this region is a strategic priority for the Group. Orange Money, its flagship offer for money transfers and mobile financial services is currently available in 17 countries and has more than 30 million customers.

Distributed by APO on behalf of Orange.

06 Feb

Rwandan Journalist Johnson Kanamugire Wins APO Group Invitation to the World’s Largest Events for Foreign Direct Investment (FDI)

APO Group, the advisory firm for companies entering the African market or expanding their presence in Africa, and owner of Africa Wire® and MENA Wire®, the press release distribution services dedicated to Africa and the Middle East, today announced that Journalist Johnson Kanamugire from Rwanda has won APO Group’s invitation to cover the Annual Investment Meeting (AIM) – one of the world’s largest events for Foreign Direct Investment (FDI) –, to be held on April 2-4, 2017 at the Dubai World Trade Centre.

The 2017 edition of AIM expects to welcome more than 15,000 participants, heads of states and governments, businessmen and investors from over 140 countries across the globe.

APO Group will offer one round trip ticket and accommodation in Dubai for Johnson Kanamugire to cover the Annual Investment Meeting (AIM).

“APO Group congratulates Johnson and is proud to offer this opportunity to an experienced Journalist with a rich background. APO offers invitations each year to major African events as part of our commitment to supporting journalism in Africa,” says Nicolas Pompigne-Mognard, Founder and CEO of APO Group.

Johnson Kanamugire is a reporter with The East African and Rwanda Today newspapers, both regional weeklies published by the Kenya-based Nation Media Group. Kanamugire is based at The East African’s Rwanda Bureau where he covers a variety of beats including business for both the main paper and Rwanda Today, a smaller weekly specific to Rwanda.

During his six years of experience, the Journalism and Communication School graduate at the National University of Rwanda has developed a career in broadcast, print and online journalism.

He worked for Radio Salus and Isango Star prior to joining KFM’s digital desk in 2013.

APO Group provides consultancy for companies entering the African market or expanding their presence in Africa. APO Group understands that securing and consolidating your position in such a diverse and complex market is important and often requires expert advice. From market research to meeting country stakeholders, from defining your digital communication strategy to meeting with the press, APO Group provides tailor-made solutions that will accelerate your market entry and development in Africa.

The advisory firm owns and manages Africa Wire® and MENA Wire®, the press release distribution services dedicated to Africa and the Middle East and is the global leader in media relations related to Africa and the Middle East.

More than 40 PR agencies have used APO Group services over the last 12 months, including Hill+Knowlton Strategies, Weber Shandwick, Waggener Edstrom Worldwide, APCO Worldwide, Edelman, Porter Novelli (UK), Ruder Finn (UK), FTI Consulting, Idea Engineers, Tribeca PR, Magna Carta, VUMA Reputation Management, WPP Team Gabon, Atmosphere Communications and Djembe Communications, to name just a few.

Distributed by APO Group.

21 Dec

Lagos to host CashlessAfrica Expo 2017

CashlessAfrica Expo 2017: Industry thought leaders from more than 40 countries to address “The future of finance” at the Lagos Oriental Hotel, Lagos – Nigeria, March 22 – 23, 2017

LAGOS, Nigeria, December 21, 2016/APO/ —

Digital disruption is shifting the balance stay of power in financial services and influencing the way, millions of people bank their money, make payments, remittances and more, in a continent where mobile phone penetration exceed bank accounts and bank cards ownership, combined.

Africa’s highly regulated financial industry now needs to adapt itself to the on-going disruptions in the Fintech space and the increasing demands of young and energetic customers which represent a significant percentage of the continent’s population.

The CashlessAfrica (www.CashlessAfrica.com) conference is a platform for financial services supply side actors to share their innovation, rethink their current models and gain valuable market insight of the African digital financial services market.

The conference agenda, keynote and interactive sessions will focus on carefully selected topics such as:

The digital bank and evolution in a Competitive market;
The Future of banking, money and payments in Africa;
Disruptive technologies and their impact on Financial Services in Africa;
Balancing regulation against innovation;
Remittances in the digital age;
Fintechs and Banks: Collaboration or Competition;
Protecting the customer in a digitalized economy.

New for 2017, the expo will host a Hackathon session which will drive collaboration to co-create solutions to compelling financial services challenges across Africa and the CashlessAfrica champion awards, given to organizations that have made a significant contribution to the digital financial services industry in Africa.

Speakers already signed up from Helix institute, Pwc Nigeria, Oradian, Millicom, Voguepay, Barclays Bank, Musoni, Wallettec, Konga, Redcloud, TransferTo, Chamsmobile, ConnectAfrica, Hormuud Telecoms, Impala pay and M-paya.

Join them and 30 other thought leaders to learn about the future of Fintech, mobile financial services, remittance and digital financial services at CashlessAfrica 2017 in the energetic city of Lagos, the economic capital of Nigeria, Africa’s largest economy.

Media Contact:
West Ekhator
kest@MobileMoneyAfrica.com

Distributed by APO on behalf of CashlessAfrica.

27 Oct

Ecobank launches Ecobank Mobile App to transform Banking in Africa

The new mobile App enables customers to open a new digital account with no more than a few clicks, with no paper references

LAGOS, Nigeria, October 25, 2016/APO/ —

Ecobank (Ecobank.com) has launched the Ecobank Mobile App, an instant and convenient way of banking via the mobile phone. It is the first unified app delivered by any institution for use in 33 countries. Group CEO, Ade Ayeyemi unveiled the new App at a large product launch in Lagos, which brought together a wide range of customers, including students, various professionals, traders and transporters. Ecobank board members, shareholders, staff and media were also present at the event.

The Ecobank Mobile App uniquely leverages the power of digital to deliver real convenience to customers. The App gives Ecobank the scale and capacity to achieve its target of attaining 100 million customers in a profitable and sustainable way.

The new App enables customers to open a new digital account with no more than a few clicks, with no paper references.

Ade Ayeyemi said: “The Ecobank Mobile App opens up opportunities for customers by allowing them to shop, transact and do business without cash. At scale, this will be transformational for Africa. Through its purchasing power and Ecobank’s partnerships with Visa and Mastercard, the Ecobank Mobile App will be an accepted means of payment. With its removal of barriers to entry and affordable price points, the Ecobank Mobile App will empower the consumer to be on the move.”

Ecobank’s Group Executive for Consumer Banking, Patrick Akinwuntan, said: “This product launch fulfils our promise to create relevant solutions for consumers. With the Ecobank Mobile App, Ecobank customers can now make and receive instant payments across 33 African countries on their mobile devices. They can also pay in store with their mobile phones. This is genuine convenience delivered to our consumers.”

At the launch, Mr. Akinwuntan demonstrated how to make a payment, how to send funds, and how to receive money from merchants using Ecobank Masterpass QR technology. He also showed that opening an XpressAccount was an instant and easy transaction.

Ecobank Nigeria’s Managing Director, Charles Kié, said: “Nigeria is a leading hub for entrepreneurship and technology for Ecobank. This is why we chose Lagos as the venue to launch the Ecobank Mobile App. This new product will allow customers in Nigeria and other affiliates across our vast network, to grow their businesses by giving them a convenient and secure way of banking.”

The innovative new platform reduces the need to carry cash. It gives customers the opportunity to deposit money through a mobile transfer.

Distributed by APO on behalf of Ecobank.

04 Oct

Rwanda: New Digital System to Boost Agribusiness, Access to Loans

A new digital system dubbed “e-Umuhinzi Platform” has been unveiled by a local microfinance bank to boost the agri-businesses sector and promote financial inclusion.

The platform was launched last week by Atlantis Microfinance in partnership with Agritech, a company that specialises in providing agri-business solutions.

While speaking at the launch of the platform in Kigali, Alfred Ndayisaba, the acting managing director of Atlantis, said though over 72 per cent of the Rwandan population is involved in agriculture in one way or another, smallholder farmers still face challenges of accessing soft loans as many banks are reluctant to give them credit.

“The agricultural sector employs the majority of Rwandans and agriculture is third biggest contributor to GDP. However, most stakeholders in the sector, especially farmers, have no access to loans. This is why we have collaborated with other stakeholders to develop the platform…what we call the ‘dynamic data driven lending’ model,” said Ndayisaba.

He added that under the new system, they collect farmers’ data and help them to easily access loans.

“Through the new platform, farmers whose details are in our database will be able to apply for loans using their smartphones through unstructured supplementary service data (USSD). So far, 250,000 farmers from 15 districts across the country have been profiled in the database, according to the bank.

“Their information has been collected, analysed and stored in the system. Once a farmer in the database applies for a loan, it will be easier for the bank to assess the application and provide the funding,” he said.

Ndayisaba said the bank has been able to increase transactional and lending activities through group loans, associations, youth co-operatives, and women to a tune of Rwf54.3 million using new technologies. The microfinance bank has served about 5,217 borrowers.

“This system is, therefore, going to help us continue supporting Rwanda’s goals for financial inclusion and achievement of a sustainable, private sector-driven economy. We’re already working with more than eight farmers’ co-operatives using this system,” said Ndayisaba. […]

You can read the full article here: allAfrica

03 Sep

Digital finance set to open opportunities in Africa

DIGITAL finance has been hailed as a powerful tool that holds opportunities in the extension of basic services and financial inclusion across Africa.

Speaking at the Africa Financial Summit, Reserve Bank deputy governor Daniel Mminele said: “One can no longer talk about growth without making reference to the fourth industrial revolution and digital finance.”

Earlier this year, the World Bank highlighted digital finance as having the capacity to contribute to reaching the goal of universal access to financial services by 2020.

About 2-billion adults across the world do not have access to formal financial services. In sub-Saharan Africa, about 30% of the population has a bank account, a low figure when compared with emerging Asia’s 50%.

Financial inclusion in East Asia is close to 70%. In SA, 77% of the adult population has a bank account.

Organisations such as the Consultative Group to Assist the Poor (CGAP) are working with financial services providers to leverage payment infrastructure that is increasing in parts of Africa and offer other financial services. The aim, said CGAP’s Michel Hanouch, was to offer more advanced services, such as credit facilities.

Kenya has successfully transformed mobile banking services to reach beyond simple money-sending capability. Mobile wallets now allow people to save and transact via their phones.

The Commercial Bank of Africa noted that mobile wallet users tended to retain money in their wallet, thus using it as a savings facility.

Eric Muriuki, who heads the new business ventures division at the Commercial Bank of Africa, said clients used their wallets like they would a current account and they wanted to capitalise on that. “What we’re looking at now is how we extend financial inclusion beyond payments so that we’re not just facilitating a money-sending service,” he said.

Financial literacy was also vital in ensuring clients had a better understanding of financial products and the importance of healthy financial habits.

This allowed the bank to extend products beyond simple money transfers.

Source: bdlive