Editor’s Note: April 02, 2019
Where are Africa’s low income banks?
Kenya’s Equity Bank is reportedly looking to invest in neighbouring Ethiopia, which recently announced long-awaited plans to liberalize its banking sector.
It could be a proverbial match made in heaven.
Ethiopia has financial service or mobile money account ownership of just 35% according to the World Bank. Its low income and largely rural population of 100m falls into a category generally considered to be ‘unbankable’.
But Equity is a rare breed, focusing on commercial lending to low income (ie. ‘poor’) consumers – a demographic generally shunned by the industry.
Mobile technology, and an unorthodox culture – the bank is known to accept marital beds as collateral – have helped it become one of the biggest lenders in Africa.
It’s exactly the kind of bank the continent needs. An estimated 58% of Africans don’t own an account with a financial service or mobile money provider. Only two countries have ownership rates higher than 70% – Namibia and Kenya.
The consensus is that conventional banks will struggle to bridge this gap. Yet despite itscommercial success, and the evident need for more lenders like it, Equity remains an exception. Restrictive regulation and a conservative banking culture have been major factors in this.
It’s a regrettable constraint on financial inclusion, and a missed business opportunity.
From The Continent
Kenya has announced plans to overhaul regulation of its booming sports betting industry, including cancelling licenses for companies that fail to fully pay their taxes by July 1. The crackdown comes amid concerns about the industry’s adverse impact on young Kenyans, 76% of whom are estimated to regularly participate in sports and other types of betting. More: The Standard
Algerian state media has reported that its embattled president Abdelaziz Bouteflika will step down before his current term is due to end on April 28. This comes after more than a month of unprecedented protests calling for his resignation. More: BBC
The Daily Stat
The number of barrels of oil per day South Sudan hopes to add to its daily production of around 350,000 - 450,000 by July. More: Reuters
The Global Perspective
The New Development Bank - a multilateral lender set up by the BRICS group of countries - has approved about $790m of loans to finance three projects in South Africa. Over half of this will go to struggling power utility Eskom. More: Reuters
Mastercard has announced a $56m investment into pan-African e-commerce startup Jumia. The deal is seen as a boon for a planned initial public offering by the Nigeria-based company in New York. More: Bloomberg