Institutions
Banks have recently entered the sector and are gaining market share
In recent years, the intermediation activity of banks with microenterprises has been rising significantly, especially in Eastern and Southern Africa, through specialist banks, local or international commercial banks, or rural banks, among others. They are currently in possession of 50% of the overall microcredit portfolio of the continent, and clearly dominate the sector in some countries, like South Africa where 2 banks, the African Bank and Capitec hold a 40% share in the market. Recently, some banks have started to do business in Western and Central Africa.
- Banks resulting from the upgrading of an NGO or an NBFI:
Some of the banks with the largest portfolio in microfinance are the result of the upgrading of NBFIs and NGOs, which affords them an exponential increase in their reach; such are the case of Equity Bankand K-Rep in Kenya, CERUDEB in Uganda, or Capitec and Teba in South Africa. The examples mentioned are the first cases in the continent but the trend has continued at a growing rate. - Deepening of commercial banking:
In some cases, the bank directly creates a department dedicated to microfinance, as is the case of the Akiba bank in Tanzania. However, the model most often repeated is that involving the setting up of a second specialist bank, the first instance of which was the creation in 2000 of Finadev (Benin), an arm of the Financial Bank dedicated to microfinance. - Creation of new banks:
They are basically promoted by cooperation bodies and international holdings, among which of particular significance are Procredit, Access Microfinance Holding and Advans. - Transnational expansion:
Going beyond neighbouring countries’ borders is now occurring in the case of banks already working in microfinance, such as Equity Bank in Kenya and the Global Trust Bank in Nigeria, with the purchase in 2008 of the Ugandan NBFI, UML and CML respectively.
