Africa needs more accessible financial solutions
Only 20percent of African households have access to formal finance said the World Bank yesterday at the launch of its publication Making Finance Work to Africa.
"A radical strategy will be needed to improve financial systems in Africa," said World Bank senior financial policy advisor Patrick Honohan.
"It's a market failure that almost everyone on this continent doesn't have a bank account."
Honohan said competition was one of the causes of poor financial systems in Africa, adding: "While on average around 74percent of the financial assets are controlled by the top three banks in African countries, the rest of the world has managed to keep this level down to 60percent."
World Bank country director for sub-Saharan Africa Ritva Reinikka said: "As important as increasing volume is the microfinance agenda of extending access to a wider community of small enterprises and poor households.
"In South Africa alone there are 28million mobile phones, but only 8million people with bank accounts," continued Reinikka, "If we can exploit technology we can bridge the gap of access to vital banking services."
Honohan said that in order to get banks working for a bigger cross-section of Afri-cans, information in-frastructures would have to be improved. "They'll have to also prune unnecessary regulations, as well as for securities markets. However, there have been huge improvements in stabilising the macro-monetary environment," he said.