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Sub-Saharan Africa: Where no banks have been before

Commercial banks eager to exploit the opportunities in a rising sub-Saharan Africa might have to pay a high price for first-mover advantage. In this most local of retail banking markets, home-grown firms have developed the most effective, innovative approaches. As Dominic O’Neill finds out while bouncing along dirt roads in Kenya and Mozambique, international firms need to follow the locals’ examples, or discard their most basic ideas of what a bank can do.


WITHIN MINUTES OF taking off and flying north from Johannesburg airport, people, houses and roads dwindle into fields almost the size of English counties. It is not long before the fields disappear altogether, and nothing is left but grassland, peppered with trees, occasionally rising hills, and long, meandering rivers. The empty landscape extends largely the same for thousands of kilometres, until the Sahara, or the rainforest, makes it even more remote.

Is this the world’s largest untapped banking market?

Economists estimate that less than 10% of the potential market in sub-Saharan Africa has a formal banking relationship. But despite the remoteness, sub-Saharan Africa is in the midst of an unparalleled baby boom. UN demographers expect the population to almost double to 1.5 billion by 2040.

As such, even with the difficulties, foreign and local groups alike in east, west and southern Africa are rapidly expanding their branch networks outside the metropolises where they have tended to huddle up to now. But how can commercial retail banks secure a profitable foothold in such undeveloped, sparsely populated areas?

Bear in mind that while India, for example, has around 250 million more people than all 53 countries of Africa added together, Africa’s surface area is around 10 times India’s.

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