Banking in Africa

More than 60 per cent of the urban metropolis in Africa have reasonable banking and other financial services. On the outer edges of these cities, as population numbers dwindle, banking and financial services are projected to be below 20 per cent.

The banking sector is particularly strong in north Africa in countries such Egypt and Morocco, in Kenya in east Africa and in most of the southern African region, where internet and telephone banking continue to enjoy rapidly increasing levels of subscription. 

The state of the banking sector and banking and financial services in general on the Africa continent is  however directly connected to the economic growth and GDPs of each of the many countries in Africa.

Literacy and income levels or poverty are some of the many historical reasons why large portions of the populations of many countries on the continent remain unbanked. Typically here workers would be paid a cash wage or salary.

Which Banks Operate in Africa

The Standard Bank group towers above all other African banking institutions and is on top of the list of the top 200 banks in Africa and is active active in 17 African countries. 

The Togo-based Ecobank operates in 31 African countries, mainly in west and central Africa. 

There are a number of banks with historical links to Africa:

Société Générale, which operates in French-speaking west Africa. 

Barclays and Standard Chartered, which are concentrated in the English-speaking countries. 

Portugal’s banks, BES, Banco BPI and Banco Millennium BCP, work in Angola and Mozambique.

Citigroup has operates a minimalistic network since the late 1950s.

However, conventional banking infrastructure and practices are generally not instituted to a satisfactory level in Africa. A notable exception is the southern African region, but even in South Africa it is estimated that 40 per cent of the population is unbanked. With all this said, it is clear that ATMs are sparsely distributed, especially in the rural areas.

Services for the unbanked in Africa

Across Africa, only 20 per cent of families have formal bank accounts. In Tanzania and Malawi, the percentage is as low as 5 per cent.

The large numbers of unbanked people has led to a large number of micro-lending services in almost each country in Africa. African people are resourceful generally, and the banking sector is no exception, so it’s not surprising then that a number of services are also available to the unbanked.

One stand-out bank here is Western Union. Many people make use of their over-the-counter wire transfer of money service, even if they don’t have bank accounts.

And very importantly is the proliferation of mobile telephone services around the African continent, expanding the access to financial services. The M-Pesa in Kenya  enables customers to access services wherever there is a mobile phone signal.