As banks in Africa consistently post healthy financial margins, the populations continue to grapple with financial exclusion, a phenomenon that may jeopardise the sustainability of financial services on the continent.
This was deliberated by delegates at the AFRICA CEO FORUM, which takes place in Kigali (March 25-26), during a high-level session titled “Rethinking Regional Expansion for the Digital Age”.
“The banks have appeared to be too profitable yet the interest rates on loans are still generally high across the continent. Because of this, we risk being looked at as getting rich on the backs of the borrowers. We need to look at the long term of the company by looking at the wellbeing of our customers,” Patrick Njoroge, Governor of the Central Bank Kenya said. His message was echoed by Alexander Maymat, the Societe Generale Head of Africa, Asia, Mediterranean Basin and Overseas. Bola Adesola, the Vice Chairperson of Africa at Standard Chartered, told the session that: “Bankers must regularly meet to find ways to mitigate the economic challenges affecting their countries. It is not all about competition among us but working together to finance digital solutions for the people.”
To drive financial inclusion, banks are now actively looking for digital opportunities. Inspired by the telecom experience. “Telecom companies have largely benefited from digital platforms such as mobile money because they are popular with customers across Africa. We need to ensure that these digital platforms are sustainable and that deposits are properly protected because they belong largely to poor populations”, Maymat said.
CEO of Orange Middle East and Africa, a leader in francophone Africa in terms of Mobile Money, Alioune Ndiaye, added: “Mobile Money was a vital digital innovation that has transformed Africa. It is mainly utilised by middle and low income earners and it has transformed their lives. We need another significant innovation like this one to once again revolutionise the continent.”
Emeke Iweriebor, Deputy CEO UBA Africa, was more cautious on the matter, saying financial institutions should take caution with new digital platforms such as cryptocurrencies. “Sometimes cryptocurrencies are indicators of illicit flaws because they are mainly used by individuals who want to move money without being detected. Digital innovation is important but we must ensure that we have credible institutions with checks and balances that will ensure their management,” Eweriebor said.