Banking in Sub-Saharan Africa: a Strategic Market Review

Tuesday, 26 April 2011 14:31

By Maris Strategies Ltd

The market for banking services in sub-Saharan Africa has been undergoing a quantum adjustment as regulatory structures change to invite foreign competition. Banks throughout the region are discovering new ways to engage people across the economic spectrum. Problems that will impact the profitability of financial institutions operating in the region include heightened competition, margin compression, and growing customer sophistication resulting in increasing demand for quality goods and services with competitive rates of interest.

Banking in Sub-Saharan Africa: a Strategic Market Review is a series of six reports that provide an in-depth analysis of the banking services markets of Botswana, Mozambique, Tanzania, Zambia and Zimbabwe – economies for which reliable information is notoriously difficult to obtain.

Based on primary research and numerous statistical sources, these reports analyse the key demographic and competitive factors to present cohesive and comprehensive sets of strategic and tactical recommendations for both incumbents and entrants looking to develop a competitive edge in the market.

Senior bankers, consultants and industry analysts interested in regional banking markets will find these reports particularly helpful as the information will enable them to optimise/modify their current product and services offerings to suit customer needs, develop operating scenarios with measurable and actionable data, and devise evaluation platforms to measure sector performance.

Volume 1: Market overview
Volume 2: Botswana
Volume 3: Mozambique
Volume 4: Tanzania
Volume 5: Zambia
Volume 6: Zimbabwe

Other country volumes to follow

Download sample pages here

Published May 2011
PDF - per volume UK £500 + VAT; EU €563 + VAT; RoW $823
Buy all 6, get one free: UK £2,500 + VAT; EU €2,814 + VAT; RoW $4,115

Volume 1: Market overview
Banking in Sub-Saharan Africa: a Strategic Market Review - Vol 1 £600.00 Add to Cart

Volume 2: Botswana
Banking in Sub-Saharan Africa: a Strategic Market Review - Vol 2 £600.00 Add to Cart

Volume 3: Mozambique
Banking in Sub-Saharan Africa: a Strategic Market Review - Vol 3 £600.00 Add to Cart

Volume 4: Tanzania
Banking in Sub-Saharan Africa: a Strategic Market Review - Vol 4 £600.00 Add to Cart

Volume 5: Zambia
Banking in Sub-Saharan Africa: a Strategic Market Review - Vol 5 £600.00 Add to Cart

Volume 6: Zimbabwe
Banking in Sub-Saharan Africa: a Strategic Market Review - Vol 6 £600.00 Add to Cart

Buy all 6, get 1 free:
Banking in Sub-Saharan Africa: a Strategic Market Review - All £3, 000.00 Add to Cart


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Key conclusions

The reports make it clear that the market for retail banking services in the region is in need of more financial institutions to engage local populations, thus providing a means for people to move into the formal economy. As the market develops and larger regional and supranational institutions enter and expand across sub-Saharan Africa armed with lower operating costs, the viability of existing organisations’ business model rests squarely on a brand identity that offers a clear value proposition to customers. Product development and positioning and consumer price-to-cost ratio are also key to viability. Sustainability will depend on a continuous process of successfully combining top-line growth with bottom-line control. Growth is likely to be multi-dimensional, originating from three key sources: new product growth, new customer growth, and organic growth.


Indicative country volume contents

Executive Summary
Maris Strategy’s market perspective
Economic indicators
Strategic recommendations

1.    Introduction

2.    Methodology
2.1.    Living Standard Measures
2.2.    Linking socio-demographic profiles with competitive data on banking products and services

3.    Country Economic Analysis
3.1.    Key elements driving the banking sector
3.2.    Legal and regulatory framework
3.3.    Banking infrastructure statistics
3.4.    Demographic trends and customer behaviours with LSM analysis

4.    Competitive Analysis
4.1.    Analysis of product and services offerings
4.2.    Other market developments

5.    Value Proposition Analysis
5.1.    Setting strategic targets with value disciplines
5.2.    Mapping key players’ value propositions in the market

6.    Market and Segmentation Analysis
6.1    Segmentation variables
6.1.1. Demographic segmentation
6.1.2    Psychographic segmentation
6.1.3    Geographic segmentation
6.1.4    Product–benefit segmentation
6.1.5    Application of demographics
6.2.    Demographics combined with competitive data analysis
6.2.1    Banking market structure
6.2.1    Banking market strategy
6.3.    Products and market segmentation analysis

Tables and Figures
Table 3.1    LSM definitions
Table 3.2    Overall LSM analysis
Table 3.3    Deposits
Table 3.3    Lending
Table 3.4    Investments
Table 3.5    Insurance
Table 3.6    Preferred methods of payments
Table 3.6    Financial intermediaries
Table 4.1    Key players offerings overview
Table 4.2    Overview of competitor financials and key market segments
Table 5.1    Value proposition variables
Table 5.2    Perspective on value proposition
Table 6.1    Market segments
Table 6.2    Market share opportunities in country’s market segments
Table 6.3    Country’s direct banking channels
Table 6.4    Microfinance and microcredit products for the self-employed in unregistered businesses

Figure 3.1    Reasons for not having bank account
Figure 3.2    Socio-economic pyramid (population aged 16+)
Figure 4.1    Key player analysis by market share
Figure 4.2    Key player analysis by asset size
Figure 4.3    Key players market positions
Figure 6.1    Banked status of population (aged over 16)


The key methodology employed is a combination of analyses of socio-demographic profiles in the country and examination of current banking products and services being offered to the customers. This approach is effective not only in identifying opportunities for offering new products and services, but also in providing critical information for measuring the performance of existing product offerings and fine-tuning the direction of existing strategic plans.

Maris Strategies consulted various primary sources to build a platform for extensive analyses. Demographic data has been acquired from four main sources: national statistical agencies, the World Bank, FinsScope (a comprehensive national household survey focused on financial services needs and usage facilitated by the FinMark Trust) and the Drumbeat Project, a pan-African Living Standard Measures (LSM) and profile database provided by Tendai Mhizha, University of Derby.
Living Standard (or Life Style) Measures have been used as a critical tool to understanding the patterns of customer behaviour and identify market segments that provide an opportunity. This approach also enables banking operators in the country to understand the size and composition of each market segment, and the nature of the banking relationships.

To help financial services providers operating (or planning to operate) in the region to identify the customers with the highest potential for their product and service offerings, Maris Strategies has analysed demographic data from various sources and identified groups of customers sharing the same or similar value criteria when choosing products and services. The key goal is to identify market segments that provide an opportunity for a financial institution to outperform the competition and quickly achieve its operative objectives.

A four-step process has been used to generate a projection for the potential target accounts available in the market and to estimate the number of accounts winnable given a value proposition on par with competitors.
Macro-economic data is analysed to provide a picture of potential growth. World Bank and IMF forecasts indicate that these regional economies will continue to grow at a vigorous rate and that there is huge growth capacity for financial services organisations in the region.

In order to assess target markets and identify opportunities in those markets, competitive analysis  examines competitors in order to evaluate their strengths and weaknesses in each market in order to identify opportunities to provide the same service with better delivery or link a target service to a complementary product offering.

Value proposition analysis is perfomed on a framework of three key elements of competitive advantage: Operational Excellence; Customer Intimacy; and Product Leadership in order to help institutions to choose their strategic focus.


Maris Strategies Ltd

Founded by Joe DiVanna in the United States in 1998, with a UK-based operation since 2000, Maris Strategies is a research think-tank for financial services, government agencies, multinational corporations and technology providers. As a research and advisory group, our unique value proposition is based on five key concepts:

•    Measurable action-based business strategies
•    The applied use of technology to create value
•    Methodologies to produce break-through thinking
•    Finding unique solutions to global organizational challenges
•    Generating ideas in our idea factory