Finance Forward Issue 2 (May 2011)
In this issue we are excited to present six new themes—those forces which are shaping the future of inclusive financial services in Africa and beyond:
Theme 1: The Most Versatile Tool—Software Unlocks the Mobile Phone’s Potential: This theme looks at the trend of mobile phone services moving from “ear to hand”—that is, voice services have moved out of the spotlight, and other services, including those made possible by a myriad of mobile applications, have taken center stage. New software is being developed all the time, and this technology is being tailored to work in the various social and economic contexts of Africa.
Theme 2: Interoperability in Branchless Banking—Reaching Across Platforms and Borders: Providers of branchless banking have yet to integrate their services so that a customer of one could use another provider’s network of agents to transact. Greater interoperability between providers would allow for greater convenience, and would also allow providers to capitalize on prior investments made in channel-building—much as banks do with ATMs, or mobile network operators do by allowing calls to be accepted from customers belonging to rival networks.
Theme 3: Microcredit facing increased scrutiny: In recent years there has been a greater push to have microfinance facilities pursue sustainability. Investors will be paying even closer attention to the social, environmental and developmental impacts of their activities. With this trend in mind, this edition of Finance Forward will look at some of the models of microfinance, including new models which include facilitating student loans for higher education and the development of shariah-compliant microfinance.
Theme 4: Financial Inclusion in Natural Disasters and Human Migration: Within Africa growing intra-regional income imbalances and effects of climate change will contribute to substantially greater mobility of people. This theme explores the role of appropriate financial services in enabling people to handle the realities of this increased level of migration. This theme also looks at the role inclusive financial services play in the aftermath of natural disasters and mitigating risks faced by people who have been impacted by climate change.
Theme 5: Uniquely Africa-Initiative and Innovation for African Development: Africans are appropriating technologies to create new business models that implement uniquely African solutions to their problems. These technologies or ‘bottom-of-the-pyramid’ innovations make use of limited infrastructure while reaching consumers who demand very low prices. Africa is increasingly being sought after for its information technologies with hubs in East Africa and Cape Town (“The Silicone Cape”). This theme examines how African initiative and inventiveness can be encouraged.
Theme 6: The rise of the African Consumer: While this theme was briefly touched on in the previous edition, it has come into its own in this issue. In Africa, consumer markets are growing at a faster rate than those in developed countries. African consumer markets could offer annual revenues of US$1.4 trillion by 2020.
Finance Forward Issue 1
With Finance Forward, Cenfri takes a wide-angle view of the forces shaping inclusive financial services in Africa. In this environmental scanning document, we present a snapshot of important ideas emerging in the business, economic, social, technological, physical and political spheres during the second quarter of 2010.
Drawn from a robust stream of periodicals, Finance Forward encourages a broad awareness of the systemic and overlapping background forces shaping the future of inclusive financial services. Finance Forward identifies four major themes and follows them through several interconnected environments and issues
Author: Joel Carlman
Theme 1: Money Goes Mobile – This theme explores the changes and innovations in mobile money models and technologies. It also looks at developments in the banking and telecommunication business environments.
Theme 2: Africa is Coming Online – This theme looks at the opportunities and complications arising from the increased connectivity of Africa through fibre-optic cables, computer and mobile technologies, and innovation in networked computing.
Theme 3: The Balancing Act – Climate & Growth – This theme highlights the need for Africans to balance development needs in the face of a changing climate. It explores developments in social trends, technologies, local action, and international collaboration regarding these issues.
Theme 4: Africa in the Middle – Following the financial crisis, Africa has found itself in a position of strategic importance on several levels. This theme deals with the various interests of international players in the African continent. Governments, businesses, and other organisations are viewing Africa—to varying degrees—as an investment destination, a source for natural resources, a hotbed of innovation, and/or an emerging consumer market.