Since the reformation of financial sectors throughout Africa in the 1990s, there has been a focus on economic development in sub-Saharan Africa through the expansion of financial services. More recently, the introduction of digital financial services has spurred further growth in the industry; traditional retail banks have adapted to provide more robust services, while innovations like mobile money have emerged. Additionally, global insurers, such as Allianz, have begun expanding in haste into markets in sub-Saharan Africa due to potential seen in the growing consumer class, the high percentage of youths, and the increase in infrastructure projects by both national and foreign parties.
Despite this, as the global financial sector looks to expand into an under-tapped market and Africans become increasingly savvy with their finances, the majority of sub-Saharan Africa’s population remains unbanked.
Traditionally, institutions in sub-Saharan Africa reserved formal banking for the upper-class, which made financial inclusion in the region challenging. Today, there are still issues that impede financial inclusion leftover from the class-centred banking tradition, and mistrust of banks and the prevalence of informal trade also contribute to low financial inclusion.
However, there are signs that the use of formal financial services is increasing; McKinsey predicts that by 2022, over half of Africans will have access to banking services. This growth —spurred in part by the massive uptake of mobile money services like M-Pesa—is expected to continue and lead to more investment by the banking sector in the region, and ultimately close the gaps seen in financial inclusion between classes.
It is clear that financial services in sub-Saharan Africa are changing rapidly; however, as expected in such a diverse continent, the availability and use of financial services varies widely by country. In response to the shifts, continual growth, and variation across sub-Saharan Africa in the finance sector, GeoPoll embarked on a study to examine how Africa’s youth in six nations are engaging with financial services.
In this report, GeoPoll presents the findings from an extensive research study to inform players in financial services on where populations currently stand. Each section provides data and analysis that serve as a barometer for the financial services space in each of the countries studied. In time, this report will also serve as a benchmark of growth as the financial sector looks back upon progress in the years to come.
GeoPoll presents the results from this study based on data collected from youth populations in Kenya, Tanzania, Uganda, Ghana, Nigeria, and Côte d’Ivoire. Topics studied include income streams, spending habits, payment types, investment decisions, savings patterns, and more. A mobile web survey was used to conduct the study. Thus, the data focuses on populations who have access to a mobile phone and basic internet services, which often represents the target population for retail banks and mobile money services.