On financial services in Africa

By | June 24, 2011

From a new Accenture report titled At the tipping point: Financial services in Africa comes of age:

The Accenture research study… highlights new growth triggers for financial services, pointing to rapid market development in some countries. While the paths to growth vary, these triggers often include innovation through (very) low-cost offerings and distribution, dramatically opening up access to financial services; investment in physical infrastructure and financial infrastructure development through more sophisticated regulations, and institution building; strong economic growth and inward investment in the economy, including by financial institutions following their clients into new countries; and growth in consumer markets driven by demographic change, including the rise of the urban middle class, and the growth in microfinance-supported businesses in rural areas.

In Accenture’s view, banks and insurers will not achieve sustained success in Africa’s fast-developing markets simply by replicating traditional business models from developed countries. New strategies are needed — including adapting retail banking models to local cultural needs, and finding new ways to serve low-income customers profitably. Contributing to nationbuilding and the development of local communities is a further prerequisite in many countries. And attempts to roll out standardised models must take into account differences in local business and regulatory environments.

The report [pdf].

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