African banks reassert themselves in local markets
Global banks have their uses but local firms are proving best adapted to this rising region.
International banks are expanding in Africa. Citi, for example, is looking to open full-service operations in three more African countries in the next 12 to 18 months, bringing its Africa country network to 18. But as Africa’s economy grows, African financial institutions are increasingly successful.
National authorities are understandably keen to promote national banks, especially given the colonial associations of Standard Chartered, Crédit Agricole et al. And, as in other sectors and regions, local firms are better adapted to the environment. Take the success of Somali money transfer firm Dahabshiil.
Global banks bring technological advantages, notably in cash management. International firms retain better links to global capital and trade networks too. But banks from the developed world (Standard Chartered included) tend to cater to an elite. Banks such as Kenya’s Equity Bank mine far deeper markets, with innovations such as using cows as collateral.
Since 2005, Togo-based Ecobank has grown into Africa’s most widespread bank. It has formed an alliance with Bank of China and now has more than 750 branches in 32 countries, helping Africa’s much-needed integration.
In Nigeria, Guaranty Trust Bank and Zenith Bank have grown from creation in the early 1990s to challenge incumbents UBA and First Bank (while UBA has developed a 20-country African network).