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Afrika – a financial challenge

Investment needs in financial structures

You often get the idea, when Africa is mentioned, of poverty and famine. And of course, many live under severe conditions but you shouldn´t forget the fantastic Africa. An Africa where natural resources flows, and businesses are thriving. In the last 50 years there has been a lot of work on getting a well working banking system which has turned out to be mainly about the people of Africa themselves to fix. Today anyone can invest in Africa as well as the rest of the world. Most important is building financial structures for the African people being able to create a better life for themselves. Africa needs banks, for rich and for poor.

Poverty decreases

To understand how it works in African countries you need to open your eyes and your mind to the contrasts there are. Armed conflicts have decreased but it is still unstable in some parts of Africa which creates an uncertainty with financers. Hard work continues to create democracy in all parts of Africa, but there is still a long way to go. South of the Sahara´s only 63% of the people live in free or partially free countries.  World bank recently showed numbers on poverty decreasing and “the Economist” tells about a growing African middle class. It is a large growth in the region but still every man is seen as poor. There is a large growth, but the economic wins are divided wrongly. The gap between rich and poor is still overwhelmingly big and for the poor it is hard to change their way of life.  

Need for change

The main factor in all work with changes is that change can´t be made without will and ability, the force has to come from inside. That is the fact both when it comes to the little person as well as an entire continent. People around the world can help in the change. It is important that international financers help the existing financial institutions in the poor areas. 88% of the people living south of the Sahara´s lack access to financial services. The poor has an equal need to save and loan money as anybody else. As it is now, they are bound to loan from loan sharks or friends instead of getting a credit and support from a serious banker. As well they are forced to hide their money in their mattresses instead of getting help to invest with serious actors.

Need for support

You can ask yourself if poor people really need banks. The answer is undoubtedly yes. They are the ones in real need of the banks. Living on a few dollars a day means you don´t have the money in your hand every day. Often income is very unsecure and by combining saves with loans these people could manage upcoming situations in the short run and plan for their future. The problem is that regular banks in Africa don´t want to help the poor people because of the lack of profit. That is why they only handle the rich people and their money. The few banks that handle small finances can see that they are good clients and that it is possible to adjust their services to their prerequisites, but these banks are in great need of help from outside in forms of investments, to make their businesses sustainable.

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