Africa has always been and will continue to be a dynamic landscape, from both a physical and a human geography perspective. While in the past the continent's rich resources were used for the advantage of others, the time is now for Africa to move into a new era of self-sufficiency born out of increased trade. The current innovations in the banking sector are supporting this growth and change.
The banking sector has moved forward significantly since the beginning of my career, when banks in Africa essentially acted like savings banks that collected deposits and invested in treasury bills. Sometimes they financed big corporates but SMEs and entrepreneurs were not factored into their strategies in the slightest. Borrowers had to find other ways to finance themselves, for example through pooled investments or microfinance institutions.
Compare this to the Africa of 2017, with a rising tide of entrepreneurship sweeping the continent, and the difference couldn't be more significant. Not content with the hierarchies and social structures of their forefathers, the young generation is ripping up the rule book. As the West goes through its own challenges, Africa is forging ahead on its own path."
New businesses boom
Africa is enjoying the highest rate of company creation globally. According to the African Economic Outlook report, no less than 22% of Africa's working-age population is starting new businesses, which is a higher rate than any other region in the world. Today, young Africans from the diaspora are going back to Africa to start their own business or to work in their native continent. They want to be part of the new African dream.
This was not the case a few years ago. This young generation is pushing for change. When you consider this entrepreneurship trend, the growing middle class and the potential of African trade, it becomes clear that African banks have no choice but to adapt and target all market segments with a dedicated product offer.
The banks respond
In fact, this change is already happening. International banks are already present in Africa, opening regional hubs for investment banking and structured finance, consumer loans and leasing, with dedicated business lines for mobile and internet banking, supply-chain or structured finance. This is the case with Ecobank, for instance.
At the end of 2016, there were six pan-African banks operating in 15 or more African markets, a growing phenomenon that should facilitate the...