‘Across sub-Saharan Africa as a whole only about a quarter of adults have accounts at formal financial institutions, and only 3% have credit cards.’
Given this state of affairs, it’s hardly surprising that Africa has developed some unique and innovative ways of banking, saving and accessing credit. From the phenomenal success of mobile banking solutions like M-Pesa in Kenya to the myriad micro-credit organisations and credit unions operating across the continent, Africa’s entrepreneurs are constantly finding new ways of increasing access to financial services.
Unfortunately, we’re unable to support such ventures. Much like job matching platforms, financial services often have a much greater commercial appeal, making them attractive to for-profits, angel investors and the like. What’s more, financial services can be complex and that makes it difficult for non-specialists (like Indigo) to be able to pick between a great service and ones that are average or even relatively poor. When it comes to people’s savings we really don’t want to get it wrong. A financial service that goes bust can do terrible harm anywhere in the world, but especially so in large parts of Africa where states do not guarantee savings in the same way as the UK. We simply don’t have the expertise or knowledge in-house to be able to make informed decisions on projects like this and, in that case, we’d much prefer to take a back seat and let savvier investors do the work.
To learn more about the state of banking in Africa, you might want to take a look at this article from The Economist.