6 Remarkable Facts About Sub-Saharan Africa Finance

The African banking scene, with a projected net interest income of over $229 billion, has grown significantly. This is especially the case for sub-Saharan Africa’s finance sector. 

Rapidly and remarkably, banks and mobile money service providers have expanded their reach and their services, linking people across the region and across the world. Learn about this growing industry and its immense potential for expansion using technology.

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1. Half of sub-Saharan Africa remained unbanked in 2021.

This represents great improvement from 2011, as the number of adults in sub-Saharan Africa who owns an account in a financial institution more than doubled in the last decade.

In comparison, the average growth in account ownership from 2011 to 2021 in developing countries was by 29 percentage points, from 42% to 71% according to the Global Findex Database.

2. Half of Africa’s fintech companies started operating in the last six years.

Progress in sub-Saharan Africa’s financial inclusion and financial access fostered and in turn was fostered by growing innovation in the continent. This figure shows how quickly the industry is expanding. The Boston Investing Group and QED Investors project for the African financial technology market to reach a value of $65 billion by the end of the decade. As such, it would become the fastest growing region in the world.

3. Although mobile money services have greatly evolved the sub-Saharan African financial landscape, they have high fees and limited options for investment and international transactions.

Companies like M-Pesa, Orange Money or Chipper Cash have made it possible for many people to easily access basic financial services using their mobile phone or an Internet connection. These services are limited when it comes to options for their users to grow their wealth, lacking, for instance, in investments options. 

High fees additionally limit the impact these fintech companies have on their clients, who may wish to access features most traditional banks offer, with the convenience mobile money services provide.

4. 90% of retail transactions in sub-Saharan Africa are conducted using cash.

Even in South Africa, which has the most mature banking and fintech sector of the region, businesses continue to prefer cash for many reasons. Some may be hesitant to incur the costs of the transition, while others may experience psychological resistance to technological change. 

Some also prefer the lack of traceability that cash transactions offer when it comes to taxes, despite the fact that cashless transactions offer greater security.

5. In rural areas, individuals often lack access to a bank branch or an ATM.

With 57% of the population of sub-Saharan Africa living in rural areas, this is a pressing problem to address. Banks are unable to maintain operations everywhere as the infrastructure costs would be too high. Mobile technology and fintech will be key in bridging this gap, especially as mobile phones become more and more ubiquitous in the region.

6. Only about a quarter of African banks respondents have spent more than $3 million on the digital transition.

This is despite the fact there is a growing need to find innovative solutions to reach those who remain unbanked, especially in rural areas. Although mobile money service providers and other financial technology companies have worked to that effect, the lack of options they provide raises another problem: that of being underbanked.

Conclusion

Sub-Saharan Africa’s financial sector has truly been transformed in the last years with the rise of digital banking. To ensure all have a chance to manage and grow their wealth for a better life, there is more we can do while leveraging this technology.

At EZO, we believe financial inclusion and financial accessibility to be of the utmost importance. Partnering with local banks to bring together the convenience of financial technology and the width of financial products traditional banking offers is our strategy to confront the puzzle of financial exclusion.

We will foster inclusivity in Africa with the EZO SuperWallet.

To learn more about the financial landscape of sub-Saharan Africa or about our EZO SuperWallet, subscribe to our newsletter and discover what we can do for you.

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Frequently Asked Questions

How Much Has Financial Inclusion Improved in Sub-Saharan Africa in the Last Decade?

Since 2011, financial institution account ownership has more than doubled in sub-Saharan Africa. It is the region of the world that has seen the greatest growth in account ownership in recent years.

What Is the Fastest Growing Region of the World in Terms of its Financial Technology Sector?

In terms of financial technology, Africa is the fastest growing region of the world, with a projected sector value of $65 billion by 2030. Sub-Saharan Africa, in particular, has seen great improvements in terms of financial inclusion in the last decade, in great part thanks to fintech.

How Does EZO Intend on Changing Sub-Saharan Africa’s Financial Landscape? 

EZO aims to partner with local banks around the world to combine expert financial products and financial technology in order to improve inclusion and accessibility.