Finacle Blog

The banking industry in North Africa has been affected the least, thanks to its minimal exposure to foreign assets. In fact, as at November last year, a time when stock-markets were tumbling the world over, Tunisia’s actually grew 17% year on year!

While South Africa easily has the continent’s most progressed banking industry, Nigeria has raised the bar and is mounting a challenge, recently doubling its share of sub-Saharan Tier1 capital, at South Africa’s expense. With some proactive measures, Kenyan government is giving the sector impetus through privatisation and other reform measures. Given the worldwide circumstances, African banking wears a refreshing outlook, with a continuing trend towards growth, consolidation and competition, and the potential segment of a vast unbanked population to tap into.

Interestingly, apart from South Africa, which largely continues to be legacy-driven, most leading banks in the continent have adopted modern core banking technology. Investments in ATM network expansion are on the rise, while net banking has not scaled and reached the masses as one would have expected with the explosion of Internet during the early part of millennium. Africa’s mobile banking is a great example of innovation, fostering widespread adoption even among the unbanked. MTN Banking, an alliance between South Africa’s Standard Bank and local mobile phone operator MTN, has expanded banking outreach by embedding its mobile banking software on SIM cards. Vodafone’s M-Pesa allows banking customers to transfer money using the inescapable SMS !

There is no doubting the land’s potential. At a projected real GDP growth rate of 5.2% and 4.7% for the years 2008 and 2009 respectively, Africa promises to be one of the most attractive and stable regions for the near future. Around the world, businesses that are looking for new markets and land of opportunities surely have a place to go to.

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