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THE INVISIBLE MARKET THE TRILLION DOLLAR AFRICAN OPPORTUNITY THE - - PowerPoint PPT Presentation
THE INVISIBLE MARKET THE TRILLION DOLLAR AFRICAN OPPORTUNITY THE - - PowerPoint PPT Presentation
THE INVISIBLE MARKET THE TRILLION DOLLAR AFRICAN OPPORTUNITY THE PERCEPTION: THE WAY MANY PEOPLE THINK ABOUT AFRICA 2 THE REALITY: AFRICA IS VERY BIG PLACE WITH LOTS OF OPPORTUNITY Macro trends Worlds fastest -growing population
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Macro trends
- World’s fastest-growing population
… 500 million more people by 2030 … Africa will account for 40% of global population growth over the next 40 years
- Rising digital usage
… 52% of urban Africans online; 25% daily … Internet access numbers in line with Russia/Brazil – ahead
- f India
- Healthy urbanization
… 50 cities over 1 million, 66 by 2016 … more urbanized than India … Urban driven consumer consumption expect to account for a $185 billion opportunity by 2020
- Optimistic, emerging middle class
… 50% of households with discretionary income … 84% believe they will be better off in 2 years
- Religious Diversity… >400 million Africans are Muslim
THE REALITY:
AFRICA IS VERY BIG PLACE – WITH LOTS OF OPPORTUNITY
SOURCE: IFC/Worldbank MSME database 2011, McKinsey & Co research, Ovamba Research, Wikipedia, CIA world factbook, the Economist
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THE REALITY
AFRICA IS CRITICALLY UNDERSERVED DESPITE ATTRACTIVE FUNDAMENTALS
Credit Demand is significant and growing Marketplace Lenders who specialise in Africa are growing quickly
Source: Company websites, Expert Interviews, IFC Website, Mckinsey & Co – expert interviews, Press search, Mondato
- US Co: Venture Backed
- SME only – short term funding
- Serves 6 countries
- Sharia certified financial firm
- Expanding geographically
- Purchased by
Barclays
- Leading South
Africa Platform
- Angel Backed
- Consumer Only
- Nigeria focused
$368 Billion 16% $1.5 Trillion
Annual African SME credit gap SME’s served by banks Aggregate Credit Gap (Consumer / SME)
35 million units
Housing Unit Gap
- Rocket
Internet
- S.Africa only
Only 4 significant commercial players in a 1.1 Billion Person Market
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5 THE REALITY
LOCAL CAPITAL IS AVAILABLE – BUT HIGHLY REGULATED
AFRICAN INSTITUTIONS HAVE CASH RESERVES OF OVER $450 BILLION THAT THEY STRUGGLE TO DEPLOY
- Africa based private
wealth managers
- Local sovereign
wealth funds and DFI’s
- African Pensions (top
six countries)
- African Insurers
$60B $200B $131B $60B “We are the leading pension with political pressure to invest locally, but we can’t find liquid proven assets in country”
- CIO at government pension fund
“We are one of the biggest insurers in Nigeria. We are investing locally in real estate only. That’s the only asset class we can invest in that provides yield.
- Investment officer at large Nigerian insurer
Marketplace Lenders leverage global institutional and local retail capital to grow
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THE REALITY
HISTORIC MODELS OF TECHNOLOGY ADOPTION USE AMERICA AS A BASELINE…
http://time.com/2966515/landline-phones-cell-phones, Mstat Mobile solutions, LIBERUM
Rates of adoption of new technologies
An evolutionary approach to the spread of technology and technology adoption by the population
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THE REALITY
… HOWEVER AFRICAN TECHNOLOGY ADOPTION CYCLES ARE FASTER AND HOUSEHOLD ADOPTION MORE COMPLETE ONCE ADOPTED
SOURCE: Africa.upenn.edu, Ovamba research, world bank, population pyramid, cia world factbook, http://time.com/2966515/landline-phones-cell-phones/
Telecommunications:
Households Access
- 98% wireless only
- 98-99% pre-paid
plans Telecommunications: Households Access
- 41% wireless only
- 75% post-paid plans
CASE STUDY: M-Pesa launched in 2007 Kenya: Mobile payment solution Penetration: Ubiquity (67% of adult population) 67% of national payments (by volume) done via m-pesa
Note: US Mobile phone based payments – estimated at 10% of US mobile phone user population in 2016.
CORE LESSONS: AFRICAN MARKETPLACE LENDERS HAVE A CHANCE TO OWN ENTIRE FINANCIAL SHARE OF WALLET
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OUR EXPERIENCE IN WHAT IT TAKES TO BUILD A GREAT AFRICAN MARKETPLACE LENDING BUSINESS
IT’S A MARATHAN NOT A SPRINT DEEP LOCAL KNOWLEDGE IS CRITICAL CULTURE MATTERS ENGAGE STAKEHOLDERS EARLY YOU ARE SYSTEMICALLY IMPORTANT BUILD YOUR OWN INFRASTRUCTURE
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