SME Times News Bureau | 19 Apr, 2014
An international logistics
group has said growth in Africa's financial services sector is
providing great opportunities to drive the continent's economic
growth and development.
In a report released here Friday, DHL
Express Sub-Saharan (SSA) director Sumesh Rahavendra said growing
economy, increased political stability and willingness to trade with
international partners is making the continent more investor
friendly, reported Xinhhua.
This presents significant
opportunity for financial service entities to expand their customer
base and derive revenue from traditional banking products, he
said.
"Retail banking, in particular, is a key focus for
both international and regional banks, and requires these entities to
extend their footprint and make financial services products available
in regions previously unexplored," Rahavendra said.
Retail
banking in Sub-Saharan Africa is projected to grow at a compound
annual rate of 15 percent between now and 2020, bringing the sector's
contribution to the continent's collective gross domestic product
(GDP) to 19 percent from an estimated 11 percent in 2009.
"Retail
banking in particular is a key opportunity," Rahavendra
said.
He said that in the region there is also a trend where
multinational banking institutions partner with local entities who
are familiar with the region, which allows them to meet the needs of
their customers across diverse regions.
In his view, being
open to opportunities in historically unattractive countries is also
key to success in Africa.
The report explained that despite
many opportunities, financial service providers are also likely to
experience challenges in the region.
Such challenges includes
customs clearance, varying regulations and tariffs that may impact
the movement of physical goods such as IT equipment, marketing
material and bank cards.