TRENDS
Regarding institutions
- Cooperative institutions will go on being an outstanding figure, particularly in Western and Central Africa.
- The presence and role of regulated and supervised institutions, in particular, banks, will continue to grow, which is likely to lead to an increase in the scale of such institutions, and, consequently, in an increase in the level of banking penetration.
- These commercial banks, supported by international cooperation agencies, and motivated by competition in other sectors, will continue with the deepening process. This process, however, is expected to be slow, and there are likely to be steps back.
- There will be further examples of the institutional upgrading of NGOs to NBFIs, and of the latter to banks. In this respect, new cases have already been announced, such as that of Faulu Kenya, an NGO planning to turn into a bank, or the Ugandan NBFI, UML and CML, now taken over by Kenyan and Nigerian banks, which have likewise requested their conversion to a bank.
- There will be new banks regulated, supervised and promoted by international bodies and by financial holdings. To mention an example, the planned start of operations of AccessBanque Liberia and Advans Congo.
- The process of transnational expansion will continue.
- In this context of greater competition, featuring the entry into the market of banks and the upgrading of the main NGOs and NBFIs, there is likely to be a consolidation and rationalization of the markets, while institutions which fail to reach institutional sustainability, particularly the smaller NGOs, are likely to disappear.
- First-tier public banks will continue to be a minority. In the near future, further prospects of the privatisation of state institutions could emerge.
- There will be more instances of new distribution models, particularly those using technology to reduce costs and make up for the lack of infrastructure and access to isolated areas, such as mobile banking.
- Certain institutions will start experiencing liquidity problems, together with problems deriving from exchange rate risk.
