AFRRI 2017: is ‘Leapfrogging’ Still the Solution to Financial Services in Africa?

This is the question posed by the African Financial Retail Readiness Index 2017 (AFRRI).

The second annual AFRRI report looks at eight countries from Sub-Saharan Africa, comparing various metrics to determine the maturity of the current financial retail services in each country, and highlighting areas of opportunity for formal retail banking.

Produced by Calleo, a South African based marketing consultancy, in consultation with iVeri Payment Technologies, a leading global payment solution provider, the report gives a thorough analysis of the key metrics that are required for a country to have a robust financial services sector.

Looking at factors such as demographics, economics, literacy, infrastructure, and existing banking footprints the report gives a ‘AFRRI score’ to each of the countries profiled, indicating how ‘ready’ the country is to support large scale retail banking operations.

Once again South Africa comes out as a clear leader in the final AFRRI scoring, with uniformly good scores across all metrics. South Africa has a well-developed banking sector, supported by good infrastructure and literacy scores. South Africa therefore rises above the other countries in this comparison. There is, however, room for improvement as demographic and economic indicators do not stand out significantly from the rest of the group.

In a shift from last year’s report, Ghana has moved into second place due to a strong growth in infrastructure, giving it a significant boost compared with the other focus countries. This is particularly interesting when compared to Kenya, who was unseated from the second place by this rise.

The widespread adoption of mobile money in Kenya as caused one of the clearest examples of ‘leapfrogging’ in financial services globally, with more people having access to banking technology and services despite a lack of traditional supporting infrastructure.

Ghana, on the other hand is still below Kenya in account ownership metrics, but is seeing growth in the underlying infrastructures that make broader financial services possible. Ghana is therefore taking a more traditional route to banking services.

It will be interesting to track this difference in coming years and see which is ultimately more successful in providing not only greater financial inclusion but also full retail banking services to the population at large.

The challenge is for the retail financial services industry to come up with solutions that will work in Africa. While banks may have world-class technology, they need to consider what is feasible and provide unique solutions that are able to deal with Africa’s unique environment.
The full 2017 AFRRI report can be downloaded at