"The report explained that despite many opportunities, financial service providers are also likely to experience challenges in the region."
Johannesburg, April 19 - An international logistics group has said growth in Africa's financial services sector is providing great opportunities to drive the continent's economic growth and development.
In a report released here Friday, DHL Express Sub-Saharan - director Sumesh Rahavendra said growing economy, increased political stability and willingness to trade with international partners is making the continent more investor friendly, reported Xinhhua.
This presents significant opportunity for financial service entities to expand their customer base and derive revenue from traditional banking products, he said.
Retail banking, in particular, is a key focus for both international and regional banks, and requires these entities to extend their footprint and make financial services products available in regions previously unexplored, Rahavendra said.
Retail banking in Sub-Saharan Africa is projected to grow at a compound annual rate of 15 percent between now and 2020, bringing the sector's contribution to the continent's collective gross domestic product - to 19 percent from an estimated 11 percent in 2009.
Retail banking in particular is a key opportunity, Rahavendra said.
He said that in the region there is also a trend where multinational banking institutions partner with local entities who are familiar with the region, which allows them to meet the needs of their customers across diverse regions.
In his view, being open to opportunities in historically unattractive countries is also key to success in Africa.
The report explained that despite many opportunities, financial service providers are also likely to experience challenges in the region.
Such challenges includes customs clearance, varying regulations and tariffs that may impact the movement of physical goods such as IT equipment, marketing material and bank cards.