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Emerging Opportunities in the
Sub-Saharan African Consumer
Finance Market: Market Size,
Strategies, Products and
Competitive Landscape
Industry Forecast Report
Reference code: IS2020MR
Published: August 2012BRICdata
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EXECUTIVE SUMMARY
Emerging Opportunities in the Sub-Sahara Africa Consumer Finance Industry: Market Size, Strategies,
Products and Competitive Landscape Page 2
© BRICdata. This product is licensed and is not to be photocopied Published: August 2012
1 Executive Summary
South Africa
Market size
The South Africa consumer finance market valued ZARX.XXX trillion (US$XXX.X billion) in 2011, after growing at a
compound annual growth rate (CAGR) of X.XX% during the review period (2007–2011). It is projected to retain a
high CAGR of X.XX% over the forecast period (2012–2016) to reach a value of ZARX.XXX trillion in 2016. The
robust growth will be primarily driven by rising disposable income, but strict money lending measures will also
contribute to the industry’s growth.
Housing loans is the largest category in the South African consumer finance market, accounting for XX.X% of the
total consumer finance market in 2011. The personal loan segment is the second-largest category, accounting for
XX.X% of the total market in 2011.
The credit card loan category was the fastest-growing category in the South Africa consumer finance market during
the review period, with a CAGR of XX.XX%. Over the forecast period, all segments are projected to post positive
growth and credit card loans are projected to have highest growth rate at a CAGR of XX.XX%.
Trends and drivers
The consumer finance market in South Africa declined in 2009 but managed to restore gradually from the fourth
quarter of 2010. The recovery is primarily attributed to higher purchasing power due to economic development.
South Africa’s rising student population is expected to generate more demand for personal loans. The improving
economic conditions in the country will also encourage students to enroll in universities abroad, creating a higher
demand for personal loans.
The auto loan market in South Africa recorded steady growth during the review period, due to the strengthening of
the auto sector as more people purchased cars.
The credit loan market in South Africa has huge potential due to the rising expatriate population. It is likely to grow
as companies develop more widespread and focused marketing strategies, and more attractive loan packages
through cross-branding promotions.
Challenges
The ongoing sovereign debt crisis in Europe is expected to impact the South African banking sector. This will
greatly reduce the opportunities to attract funds from foreign banks and is expected to result in increased interest
rates. This is likely to affect the South African consumer finance industry.
The stringent measures taken by the banking industry to reduce defaults in the auto sector are likely to pose
challenges for auto loans, which were among the easiest loans to access in South Africa. This is likely to affect the
overall consumer finance industry.
Non-performing assets and default loans in the bank have posed huge challenges for the consumer finance
industry, leading to stringent regulations affecting the overall lending process.
Regulations
The South African banking sector is heavily regulated to ensure proper oversight of its operations. The Reserve
Bank is responsible for bank regulation and supervision.
The criteria for the registration of a foreign bank are the same as for domestic banks, which have to comply with
the regulations of the Reserve Bank.
Competitive landscape
The four main domestic banks, Standard Bank, Absa Bank, Nedbank and FirstRand, together make up XX% of the
total banking industry in South Africa.
Foreign banks are actively present, with Barclays owning XX.X% of Absa Bank.
EXECUTIVE SUMMARY
Emerging Opportunities in the Sub-Sahara Africa Consumer Finance Industry: Market Size, Strategies,
Products and Competitive Landscape Page 3
© BRICdata. This product is licensed and is not to be photocopied Published: August 2012
Nigeria
Market size
The Nigerian consumer finance market recorded strong growth during the review period and was valued at
NGNXX.X trillion (US$XX.X billion) in 2011. It is projected to register a CAGR of XX.XX% over the forecast period
to reach a value of NGNXX.X trillion (US$XX.X billion) by 2016. The strong growth will be driven by the country’s
improving macroeconomic conditions, government intervention and rising domestic demand for consumer finance
products.
Personal loans (consumer durables, purchases against securities and personal consumption loans) occupy the
largest share – the market was valued at NGNXX.X trillion (US$ XX.X billion) in 2011 and recorded a CAGR of
XX.XX% during the review period. The category is expected to grow at a CAGR of XX.X% to reach NGNXX.X
trillion (US$XX.X billion) by 2016.
Auto loans are the second-largest category in the Nigerian consumer finance market. The market registered a
CAGR of XX.XX% during the review period to reach NGNXXX.X billion (US$XX.X billion) in 2011. The category is
projected to grow at a CAGR of XX.XX% over the forecast period to reach NGNXX.X trillion (US$XX billion) by the
end of 2016.
The Nigerian housing loans category was valued at NGNXXX.X billion (US$XX.X billion) in 2011. The growth in
residential construction in Nigeria and the reforms undertaken by the Federal Mortgage Bank of Nigeria have
prompted people to opt for housing loans to buy flats and apartments.
The credit card loans market in Nigeria valued NGNXX.X billion (US$XXX million) in 2011, and recorded a CAGR
of XX.XX% during the review period. As the focus of finance companies shifts away from credit cards due to
increasing forgery-related activities, credit card loans are projected to grow at a CAGR of XX.XX% over the
forecast period to reach NGNXXX billion (US$XXX million) in 2016.
Education loans are projected to grow at a CAGR of XX.XX% over the forecast period to reach NGNXXX.X billion
in 2016. The category is expected to grow significantly due to an increasing number of Nigerian students moving
abroad (predominantly to the UK and US) to pursue higher education.
Trends and drivers
An increasing number of vehicle imports into Nigeria is expected to drive the growth of auto sales, boosting the
market for auto loans in the country.
With the increasing number of Nigerian students moving abroad for the higher education, the education loan
category is expected to witness significant growth in the volume of applications.
Commercial banks are offering innovative consumer finance products and related services to capture market
share. Bank PHB’s 2008 holiday loan scheme and Ecobank’s Advance Account, with prompt personal loans to
salaried account holders, are some examples.
There is huge potential among the rural population, XX% of which is unbanked, and commercial banks are
expanding their presence there. In 2011, Access Bank increased its number of branches from XXX to XXX, an
increase of XXX%. Ecobank increased its branches from XXX in XXXX to X,XXX in 2011, and Fidelity Bank added
XX branches in 2011.
Challenges
The increasing unemployment rate presents significant challenges for the consumer finance industry in Nigeria. In
2011, the country’s unemployment rate stood at XX.X%, compared with XX.X% in 2007.
Along with other challenges such as illiteracy, irregular income, unemployment and the distance of banks from
people residing in rural areas, lack of awareness about the availability of consumer loan is a key challenge.
Increasing interest rates are constraining the growth of the consumer finance market. In November 2011, The
Central Bank of Nigeria increased the prime lending rate by XXX basis points to XX%.
Regulation
The Nigerian consumer finance industry is well regulated and controlled by the Central Bank of Nigeria.
Banks engaged in both corporate and retail banking must ensure their retail financing portfolio does not exceed
XX% of their total loan portfolio.
Vehicles for personal use are covered under retail financing. Commercial vehicles are excluded. The maximum
tenure of an auto loan is four years.
Banks are expected to determine the housing finance limit, both in urban and rural areas, in accordance with their
internal credit policy, and the creditworthiness and loan repayment capacity of the borrowers. The total monthly
EXECUTIVE SUMMARY
Emerging Opportunities in the Sub-Sahara Africa Consumer Finance Industry: Market Size, Strategies,
Products and Competitive Landscape Page 4
© BRICdata. This product is licensed and is not to be photocopied Published: August 2012
amortization payments of consumer loans (inclusive of housing loan) should not exceed XX.XX% of the net
disposable income of the prospective borrower.
Competitive landscape
Under the 2005 consolidation program, the Central Bank of Nigeria requested that the capital base of commercial
banks increase to a minimum of NGNXX billion, against the NGNX billion that was previously necessary. The led to
a reduction in the number of commercial banks in the country from XX to XX.
The banking industry in Nigeria is highly consolidated with top 10 banks accounting for approximately XX% of the
banking sector.
First Bank of Nigeria is the largest bank in terms of assets with NGNXX.X trillion (US$XX.X billion), Zenith Bank is
the second largest in terms of assets, with NGNXX.X trillion (US$XX.X billion) as of year-end 2011.
EXECUTIVE SUMMARY
Emerging Opportunities in the Sub-Sahara Africa Consumer Finance Industry: Market Size, Strategies,
Products and Competitive Landscape Page 5
© BRICdata. This product is licensed and is not to be photocopied Published: August 2012
Kenya
Market size
The Kenyan consumer finance market valued KESXXX.X billion (US$X.X billion) in 2011, increasing at a CAGR of
XX.XX% during the review period. The market is projected to record a CAGR of XX.XX% over the forecast period,
driven by the strong macroeconomic conditions and the growing consumer demand for consumer finance products.
Personal loans are the largest category in the Kenyan consumer finance market. The category valued at KES183
billion (US$X billion) in 2011, after recording CAGR of XX.X% during the review period.
The Kenyan credit card loans category was valued at KESX.X billion (US$XX.X million) in 2011, recording a CAGR
of XX.XX% during the review period. The Kenyan credit card category is still in the initial stages of development
and accounted for X.X% of the Kenyan consumer finance market in 2011.
The Kenyan auto loans category recorded a CAGR of X.XX% during the review period, to reach a value of
KESXX.X billion (US$X.XX billion) in 2011.
The Kenyan housing loans category was valued KESXX.X billion (US$X billion) in 2011, recording a strong CAGR
of XX.XX% during the review period.
The Kenyan education loan category recorded a CAGR of XX.XX% during the review period, to value KESX.X
billion (US$XX.X million) in 2011.
Trends and drivers
Healthy economic growth and rising income levels encouraged more people to purchase houses during the review
period. The number of outstanding housing loan accounts in Kenya increased from X,XXX in 2007 to XX,XXX in
2011. The number of housing loans will continue to increase over the forecast period.
Changing lifestyles in Kenya have encouraged increased use of credit cards. The number of credit cards in
circulation increased at a CAGR of X.XX% during the review period, from XXX,XXX in 2007 to XXX,XXX in 2011.
The increasing credit card penetration will drive credit card growth over the forecast period.
The increasing number of stores accepting credit cards will also drive their use.
Challenges
The Central Bank of Kenya has increased the country’s interest rates following a tightening monetary policy.
Interest rates in Kenya increased five times in 2010–2011, from X% in 2010 to XX% in 2011. The rise will become
a major obstacle for the development of the consumer finance market in Kenya.
New domestic car sales in Kenya declined by X.XX% during 2008–2011 due to the depressed economic
conditions. Declining car sales in the country will be one of the major challenges for the Kenyan consumer finance
industry, as a large number of Kenyan car buyers use auto loans to purchase cars.
Regulation
The Central Bank of Kenya is the body that governs and regulates the entire banking sector in Kenya. The Central Bank-authorized agency NPS regulates and controls the payment system.
Competitive landscape
In terms of assets, Kenya Commercial Bank (KCB) is the largest bank in the country, with a XX% share. It is
followed by Equity Bank, which has an X.X% market share.
The Kenyan housing loan category is concentrated, with the six leading companies together accounting for XX% of
the market in 2011. The leading housing loan providers are Housing Finance Company of Kenya Ltd (HFCL), KCB,
CFC Stanbic, Standard Chartered Bank and Barclays Bank.
EXECUTIVE SUMMARY
Emerging Opportunities in the Sub-Sahara Africa Consumer Finance Industry: Market Size, Strategies,
Products and Competitive Landscape Page 6
© BRICdata. This product is licensed and is not to be photocopied Published: August 2012
Botswana
Market size
The Botswanan consumer finance market recorded strong growth during the review period, and was worth
BWPXX.X billion (US$X.X billion) in 2011. It is projected to register a CAGR of XX.XX% over the forecast period, to
reach a value of BWPXX.X billion (US$X.X billion) in 2016. The growth will be driven by the country’s improving
macroeconomic conditions and rising domestic demand for consumer finance products.
Housing loans is the second-largest category in the Botswanan consumer finance market. It stood at BWPX.X
billion (US$X.X billion) in 2007 and recorded a CAGR of XX.XX% during the review period, to reach BWPX.X
billion (US$X.X billion) in 2011.
Auto loans grew at a CAGR of X.XX% during the review period and this sector is projected to grow at a CAGR of
XX.XX% over the forecast period to reach BWPX.X billion (US$X.X billion) by the end of 2016.
Credit card loans in Botswana totaled BWPXXX.X million (US$XX.X million) in 2007. The sector recorded a CAGR
of XX.XX% during the review period to reach BWPXXX.X million (US$XX.X million) in 2011. The adverse effects of
the global financial crisis were felt in this category, slowing growth. However, credit card loans are projected to
grow at a CAGR of XX.X% over the forecast period to reach BWPX billion (US$XXX.X million) by the end of 2016.
Personal loans is the largest category in the Botswanan consumer finance market – it was valued at BWPX.X
billion (US$X.X billion) in 2011. The growth in residential construction in Botswana has prompted people to opt for
housing loans to buy flats and apartments
Education loans grew at a CAGR of XX.XX% during the review period and is projected to grow at a CAGR of
XX.XX% over the forecast period to reach a value of BWPX.X billion (US$XX million) in 2016. It is the smallest
category in the Botswana consumer finance market.
Trends and drivers
The number of credit cards issued by banks increased from a total of XXX,XXX cards in 2006 to XXX,XXX cards in
2010. This increase reflects the growth popularity of credit cards in the country.
The number of transactions through electronic points of sale in Botswana increased from X.X million in 2006 to X.X
million at the end of 2010. This increased number of transactions bodes well for the future of the Botswanan
consumer finance industry.
The interest rate at which the central bank in Botswana lends to commercial banks has reduced considerably over
the review period. The interest rate has remained at X.X% since the beginning of 2010 until last reported in April
2012. This has eased the amount of credit available in the market for both individuals and businesses.
Challenges
The modernization of buildings and rising living standards has resulted in housing becoming unaffordable for many.
People in Botswana have traditionally been very conservative regarding credit. While the attitude has been
changing over the last decade, any slowdown in the economic growth in the country may result in consumers
returning back to their traditional, conservative behavior.
Regulation
The total capital required by any credit institution will be the greater of BWPX.X million, or X% of the risk-weighted
assets and other risk-weighted exposures of the bank.
The International Financial Services Centre (IFSC) was established in Botswana in 2003.
Competitive landscape
Currently, the Botswanan banking system comprises seven commercial banks, mostly foreign banks.
Within the current banking sector, there are three banks listed on the Botswana Stock Exchange: Barclays Bank of
Botswana, Standard Chartered Bank of Botswana, and First National Bank of Botswana. There are four unlisted
banks: Stanbic Bank, Bank of Gaborone, Bank of Baroda and Capital Bank.
TABLE OF CONTENTS
Emerging Opportunities in the Sub-Sahara Africa Consumer Finance Industry: Market Size, Strategies,
Products and Competitive Landscape Page 7
© BRICdata. This product is licensed and is not to be photocopied Published: August 2012
TABLE OF CONTENTS
1 Executive Summary ......................................................................................................................... 2 2 Sub-Saharan Africa – Consumer Finance Market Benchmarking ................................................ 14
2.1 Sub-Saharan Africa – Consumer Finance Market Dynamics ............................................................. 14
2.1.1 Housing loans .................................................................................................................................. 15
2.1.2 Personal loans ................................................................................................................................. 16
2.1.3 Auto loans ........................................................................................................................................ 17
2.1.4 Credit card loans .............................................................................................................................. 18
2.1.5 Education loans ................................................................................................................................ 19
2.2 Macroeconomic Factors ................................................................................................................... 20
3 Consumer Finance Market in South Africa ................................................................................... 21
3.1 Outlook of Consumer Finance in South Africa ................................................................................... 21
3.2 South African Consumer Finance Market Dynamics ......................................................................... 23
3.2.1 Macroeconomic fundamentals .......................................................................................................... 23
3.2.2 Consumer attitude towards credit ..................................................................................................... 27
3.2.3 Key performance indicators .............................................................................................................. 27
3.2.4 Regulatory framework ...................................................................................................................... 31
3.3 South African Consumer Finance Market Size and Growth Potential ................................................ 32
3.3.1 Overview .......................................................................................................................................... 32
3.3.2 Personal loans ................................................................................................................................. 34
3.3.3 Credit card loans .............................................................................................................................. 35
3.3.4 Auto loans ........................................................................................................................................ 36
3.3.5 Housing loans .................................................................................................................................. 37
3.3.6 Education loans ................................................................................................................................ 38
3.4 Key Trends and Growth Drivers for the South African Consumer Finance Market ............................. 39
3.5 Industry Structure and Competitive Landscape ................................................................................. 42
3.5.1 Company profiles ............................................................................................................................. 43
3.6 Strategies ......................................................................................................................................... 44
3.6.1 Marketing and product strategies ...................................................................................................... 44
3.6.2 Market entry strategies ..................................................................................................................... 45
3.6.3 Expansion and growth strategies ...................................................................................................... 46
3.7 Challenges ....................................................................................................................................... 47
4 Consumer Finance Market in Nigeria ............................................................................................ 48
4.1 Future Outlook of Consumer Finance in Nigeria................................................................................ 48
4.2 Nigerian Consumer Finance Market Dynamics ................................................................................. 50
4.2.1 Macroeconomic fundamentals .......................................................................................................... 50
4.2.2 Consumer attitude towards credit ..................................................................................................... 55
4.2.3 Key performance indicators .............................................................................................................. 56
4.2.4 Regulatory framework ...................................................................................................................... 58
4.3 Nigerian Consumer Finance Market Size and Growth Potential ........................................................ 59
4.3.1 Overview .......................................................................................................................................... 59
4.3.2 Personal loans ................................................................................................................................. 60
4.3.3 Credit card loans .............................................................................................................................. 61
TABLE OF CONTENTS
Emerging Opportunities in the Sub-Sahara Africa Consumer Finance Industry: Market Size, Strategies,
Products and Competitive Landscape Page 8
© BRICdata. This product is licensed and is not to be photocopied Published: August 2012
4.3.4 Auto loans ........................................................................................................................................ 62
4.3.5 Housing loans .................................................................................................................................. 63
4.3.6 Education loans ................................................................................................................................ 64
4.4 Key Trends and Growth Drivers for the Nigerian Consumer Finance Market ..................................... 65
4.5 Industry Structure and Competitive Landscape ................................................................................. 67
4.5.1 Market shares of Nigerian banks by asset size ................................................................................. 69
4.5.2 Company profiles ............................................................................................................................. 70
4.6 Strategies ......................................................................................................................................... 74
4.6.1 Marketing and product strategies ...................................................................................................... 74
4.6.2 Market entry strategies ..................................................................................................................... 75
4.6.3 Growth strategies ............................................................................................................................. 76
4.7 Challenges ....................................................................................................................................... 77
5 Consumer Finance Market in Kenya ............................................................................................. 79
5.1 Future Outlook of Consumer Finance in Kenya ................................................................................. 79
5.2 Kenyan Consumer Finance Market Dynamics .................................................................................. 81
5.2.1 Macroeconomic fundamentals .......................................................................................................... 81
5.2.2 Consumer attitude towards credit ..................................................................................................... 85
5.2.3 Key performance indicators .............................................................................................................. 85
5.2.4 Regulatory framework ...................................................................................................................... 86
5.3 Kenya Consumer Finance Market Size and Growth Potential ........................................................... 87
5.3.1 Overview .......................................................................................................................................... 87
5.3.2 Personal loans ................................................................................................................................. 88
5.3.3 Credit card loans .............................................................................................................................. 89
5.3.4 Auto loans ........................................................................................................................................ 90
5.3.5 Housing loans .................................................................................................................................. 91
5.3.6 Education loans ................................................................................................................................ 92
5.4 Key Trends and Growth Drivers for the Kenyan Consumer Finance Market ...................................... 93
5.5 Industry Structure and Competitive Landscape ................................................................................. 96
5.5.1 Market share of Kenyan banks by assets.......................................................................................... 97
5.5.2 Market share of Kenyan banks by number of loan accounts.............................................................. 98
5.5.3 Housing loans market share ............................................................................................................. 99
5.5.4 Company profiles ........................................................................................................................... 100
5.6 Strategies ....................................................................................................................................... 102
5.6.1 Marketing and product strategies .................................................................................................... 102
5.6.2 Market entry strategies ................................................................................................................... 103
5.6.3 Growth strategies ........................................................................................................................... 104
5.7 Challenges ..................................................................................................................................... 105
6 Consumer Finance Market in Botswana ..................................................................................... 107
6.1 Future Outlook of Consumer Finance in Botswana ......................................................................... 107
6.2 Botswanan Consumer Finance Market Dynamics ........................................................................... 109
6.2.1 Macroeconomic fundamentals ........................................................................................................ 109
6.2.2 Consumer attitudes towards Credit ................................................................................................. 113
6.2.3 Key performance indicators ............................................................................................................ 114
TABLE OF CONTENTS
Emerging Opportunities in the Sub-Sahara Africa Consumer Finance Industry: Market Size, Strategies,
Products and Competitive Landscape Page 9
© BRICdata. This product is licensed and is not to be photocopied Published: August 2012
6.2.4 Regulatory framework .................................................................................................................... 116
6.3 Botswana Consumer Finance Market Size and Growth Potential .................................................... 117
6.3.1 Overview ........................................................................................................................................ 117
6.3.2 Housing loans ................................................................................................................................ 118
6.3.3 Auto loans ...................................................................................................................................... 119
6.3.4 Credit card loans ............................................................................................................................ 120
6.3.5 Personal loans ............................................................................................................................... 121
6.3.6 Education loans .............................................................................................................................. 122
6.4 Key Trends and Growth Drivers for the Botswana Consumer Finance Market ................................. 123
6.5 Industry Structure and Competitive Landscape ............................................................................... 127
6.5.1 Overview ........................................................................................................................................ 127
6.5.2 Company profiles ........................................................................................................................... 129
6.6 Business and Operational Strategies .............................................................................................. 135
6.6.1 Marketing and product strategies .................................................................................................... 135
6.6.2 Market entry strategies ................................................................................................................... 136
6.6.3 Expansion and growth strategies .................................................................................................... 137
6.7 Challenges ..................................................................................................................................... 138
7 Appendix ...................................................................................................................................... 139
7.1 About BRICdata ............................................................................................................................. 139
7.1.1 Exchange rate ................................................................................................................................ 139
7.1.2 Areas of expertise .......................................................................................................................... 139
7.2 Methodology .................................................................................................................................. 140
7.3 Disclaimer ...................................................................................................................................... 141
TABLE OF CONTENTS
Emerging Opportunities in the Sub-Sahara Africa Consumer Finance Industry: Market Size, Strategies,
Products and Competitive Landscape Page 10
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LIST OF FIGURES
Figure 1: Consumer Finance Market Dynamics in Sub-Saharan African Countries, 2007–2016 ........................................................... 14 Figure 2: Housing Loan Market Dynamics in Sub-Saharan African Countries, 2007–2016 .................................................................... 15 Figure 3: Personal Loans Market Dynamics in Key Sub-Saharan African Countries, 2007–2016 ......................................................... 16 Figure 4: Auto Loans Market Dynamics in Key Sub-Saharan African Countries, 2007–2016 ................................................................ 17 Figure 5: Credit Card Loans Market Dynamics in Key Sub-Saharan African Countries, 2007–2016..................................................... 18 Figure 6: Education Loans Market Dynamics in Key Sub-Saharan African Countries, 2007–2016 ....................................................... 19 Figure 7: South Africa – Future Outlook for Consumer Finance (ZAR Billion) ........................................................................................ 22 Figure 8: South African GDP at Constant Prices (US$ Billion), 2007–2016 (Base Year 1999–2000) ..................................................... 23 Figure 9: South African Inflation Rate (%), 2007–2016 ................................................................................................................................. 24 Figure 10: South African FDI Inflows (US$ Billion), 2007–2010 .................................................................................................................. 25 Figure 11: South African Urban and Rural Population (%), 2007–2016 ..................................................................................................... 26 Figure 12: South African Banking Industry Value by Consumer Loans and Deposits (US$ Billion), 2007–2016 ................................ 29 Figure 13: South African Banking Industry Growth by Performance Indictor (%), 2007–2016 .............................................................. 30 Figure 14: South African Consumer Finance Market Size (ZAR Billion), 2007–2016 ............................................................................... 32 Figure 15: South African Consumer Finance Market Size by Category (ZAR Billion), 2007–2016 ........................................................ 33 Figure 16: South African Personal Loans Category Size (ZAR Billion), 2007–2016 ................................................................................ 34 Figure 17: South African Credit Card Loans Category Size (ZAR Billion), 2007–2016 ............................................................................ 35 Figure 18: South African Auto Loans Category Size (ZAR Billion), 2007–2016 ........................................................................................ 36 Figure 19: South African Housing Loans Category Size (ZAR Billion), 2007–2016 ................................................................................. 37 Figure 20: South African Education Loans Category Size (ZAR Billion), 2007–2016 .............................................................................. 38 Figure 21: South African Number of Households (Million), 2007–2016 ..................................................................................................... 39 Figure 22: South Africa Mobile Penetration Rate (Million), 2007–2016 ...................................................................................................... 40 Figure 23: Top Ten South African Banks by Assets (ZAR Billion), 2011 ................................................................................................... 42 Figure 24: Market Shares of South African Banks (% Share), 2011 ........................................................................................................... 42 Figure 25: Expansion and Growth Strategies – South Africa .................................................................................................................... 46 Figure 26: South African Consumer Finance Market Challenges .............................................................................................................. 47 Figure 27: Nigerian Consumer Finance Market Outlook (NGN Billion), 2011–2016 ................................................................................. 49 Figure 28: Nigerian GDP at Constant Prices (US$ Billion), 2007–2016 (Base Year 1999–2000) ............................................................. 50 Figure 29: Nigerian Inflation Rate (%), 2007–2016 ........................................................................................................................................ 51 Figure 30: Nigerian FDI Inflow, (US$ Billion), 2007–2010 ............................................................................................................................. 52 Figure 31: Nigerian Urban and Rural Populations, 2007–2016 ................................................................................................................... 53 Figure 32: Nigerian Population (Million), 2007–2016 .................................................................................................................................... 54 Figure 33: Nigerian Banking Industry – Key Financial Metrics (US$ Billion), 2007–2011 ....................................................................... 56 Figure 34: Nigerian Banking Industry – Key Financial Metrics (US$ Billion), 2012–2016 ....................................................................... 57 Figure 35: Nigerian Consumer Finance Market Size (NGN Billion), 2007–2016 ........................................................................................ 59 Figure 36: Nigerian Personal Loans Category Size (NGN Billion), 2007–2016 ......................................................................................... 60 Figure 37: Nigerian Credit Cards Loans Category Size (NGN Million), 2007–2016 .................................................................................. 61 Figure 38: Nigerian Auto Loans Category Size (NGN Billion), 2007–2016 ................................................................................................ 62 Figure 39: Nigerian Housing Loans Category Size (NGN Billion), 2007–2016 .......................................................................................... 63 Figure 40: Nigerian Educational Loans Category Size (NGN Billion), 2007–2016 .................................................................................... 64 Figure 41: Nigerian GDP Per Capita, Current Prices (US$ dollars), 2007–2016 ........................................................................................ 65 Figure 42: Nigerian Imports of Passenger Cars (Units), 2006–2011 .......................................................................................................... 66 Figure 43: Nigerian Banks’ Market Shares by Asset Size (NGN Billion), 2011 ......................................................................................... 69 Figure 44: Nigerian Unemployment Rate, 2007–2011................................................................................................................................... 77 Figure 45: Nigerian Prime Lending Rate, 2007–2011 .................................................................................................................................... 78 Figure 46: Kenyan Consumer Finance Market Dynamics by Category, 2007–2016................................................................................. 80 Figure 47: Kenyan GDP at Constant Prices (US$ Billion), 2007–2016 (Base Year 1999–2000) .............................................................. 81 Figure 48: Kenyan Inflation Rate (%), 2007–2016.......................................................................................................................................... 82 Figure 49: Kenyan FDI Inflows (US$ Million), 2007–2010 ............................................................................................................................. 83 Figure 50: Kenyan Urban and Rural Populations, 2007–2016 ..................................................................................................................... 84 Figure 51: Kenyan Banks Total Assets (KES Billion), 2007–2011 .............................................................................................................. 85 Figure 52: Kenyan Commercial Banks Total Deposits (KES Billion), 2007–2011 .................................................................................... 86 Figure 53: Kenyan Consumer Finance Market Size (KES Billion), 2007–2016 .......................................................................................... 87 Figure 54: Kenyan Personal Loans Category Size (KES Billion), 2007–2016 ........................................................................................... 88 Figure 55: Kenyan Credit Cards Loans Category Size (KES Billion), 2007–2016 ..................................................................................... 89 Figure 56: Kenyan Auto Loans Category Size (KES Billion), 2007–2016 .................................................................................................. 90 Figure 57: Kenyan Housing Loans Category Size (KES Billion), 2007–2016 ............................................................................................ 91 Figure 58: Kenyan Educational Loans Category Size (KES Billion), 2007–2016 ...................................................................................... 92 Figure 59: Kenyan Housing Loan Accounts, 2007–2011 ............................................................................................................................. 93 Figure 60: Kenyan Bank Non-Performing Loan Ratio (%), 2007–2011....................................................................................................... 94 Figure 61: Kenyan POS Terminals, 2007–2011 ............................................................................................................................................. 94 Figure 62: Kenyan Credit Card, 2007–2011 .................................................................................................................................................... 95
TABLE OF CONTENTS
Emerging Opportunities in the Sub-Sahara Africa Consumer Finance Industry: Market Size, Strategies,
Products and Competitive Landscape Page 11
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Figure 63: Kenyan Banking Industry Structure, December 2011 ............................................................................................................... 96 Figure 64: Kenyan Banking Industry Structure – Ownership vs Assets, December 2011 ...................................................................... 96 Figure 65: Kenyan Banking Sector Market Shares by Assets (%), 2011 ................................................................................................... 97 Figure 66: Kenyan Banking Sector Market Shares by Number of Loan Accounts (%), 2011 ................................................................. 98 Figure 67: Kenyan Housing Loan Market – Leading Companies (% Share), 2011 ................................................................................... 99 Figure 68: Kenyan Consumer Finance Market Challenges ....................................................................................................................... 105 Figure 69: Kenyan Interest Rates (%), 2007–2011....................................................................................................................................... 106 Figure 70: Botswanan Consumer Finance Market Outlook ....................................................................................................................... 108 Figure 71: Botswanan GDP at Constant Prices (US$ Billion), 2007–2016 (Base Year 1999–2000) ...................................................... 109 Figure 72: Botswanan Inflation Rate (%), 2007–2016 ................................................................................................................................. 110 Figure 73: Botswanan FDI Inflows (US$ Billion), 2007–2010 ..................................................................................................................... 111 Figure 74: Botswanan Urban and Rural Populations (%), 2007–2016...................................................................................................... 112 Figure 75: Botswanan Commercial Banks – Total Assets (BWP Billion), 2007–2011............................................................................ 114 Figure 76: Botswanan Commercial Banks – Total Deposits (BWP Billion), 2007–2011 ........................................................................ 115 Figure 77: Botswanan Consumer Finance Market Size (BWP Million), 2007–2016 ................................................................................ 117 Figure 78: Botswanan Housing Loans Category Size (BWP Million), 2007–2016 .................................................................................. 118 Figure 79: Botswanan Auto Loans Category Size (BWP Million), 2007–2016 ......................................................................................... 119 Figure 80: Botswanan Credit Cards Category Size (BWP Million), 2007–2016 ....................................................................................... 120 Figure 81: Botswanan Personal Loans Category Size (BWP Million), 2007–2016 ................................................................................. 121 Figure 82: Botswanan Education Loans Category Size (BWP Million), 2007–2016 ............................................................................... 122 Figure 83: Botswana – Three-to-Five-Year Loan Values (BWP Billion), 2007–2011 ............................................................................... 123 Figure 84: Botswanan Interest Rate (%), 2007–2011 .................................................................................................................................. 124 Figure 85: Botswana – Number of Credit Cards Issued (Thousands), 2006–2010 ................................................................................. 125 Figure 86: Botswanan Transactions through POS Terminals (Thousands), 2007–2011 ....................................................................... 126 Figure 87: Market Shares of Botswanan Banks (by Assets), 2010 ........................................................................................................... 127 Figure 88: Botswanan Consumer Finance Market – Expansion and Growth Strategy ......................................................................... 137 Figure 89: Botswanan Consumer Finance Market Challenges ................................................................................................................. 138
TABLE OF CONTENTS
Emerging Opportunities in the Sub-Sahara Africa Consumer Finance Industry: Market Size, Strategies,
Products and Competitive Landscape Page 12
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LIST OF TABLES
Table 1: Sub-Saharan African Countries’ Macroeconomic Conditions, 2011 ........................................................................................... 20 Table 2: Sub-Saharan African Countries’ Macroeconomic Indicators, 2011 ............................................................................................ 20 Table 3: South Africa Consumer Finance Market Outlook (ZAR Billion), 2011–2016 .............................................................................. 21 Table 4: South African GDP at Constant Prices (US$ Billion), 2007–2016 (Base Year 1999–2000) ....................................................... 23 Table 5: South African Inflation Rate (%), 2007–2016 .................................................................................................................................. 24 Table 6: Market Size of the South African Banking Sector.......................................................................................................................... 27 Table 7: List of Banks in South Africa ............................................................................................................................................................ 28 Table 8: South African Banking Industry Value by Consumer Loans and Deposits (US Billion), 2007–2016...................................... 28 Table 9: South African Banking Industry Growth by Performance Indictor (%), 2007–2011 .................................................................. 29 Table 10: South African Banking Industry Growth by Performance Indictor (%), 2011–2016 ................................................................ 29 Table 11: South African Consumer Finance Market Size by Category (US$ Billion), 2007–2016 .......................................................... 32 Table 12: South African Consumer Finance Market Size by Category (ZAR Billion), 2007–2016 .......................................................... 32 Table 13: South African Personal Loans Category Size (US$ Billion), 2007–2016 .................................................................................. 34 Table 14: South African Personal Loans Category Size (ZAR Billion), 2007–2016 .................................................................................. 34 Table 15: South African Credit Card Loans Category Size (US$ Billion), 2007–2016 .............................................................................. 35 Table 16: South African Credit Card Loans Category Size (ZAR Billion), 2007–2016.............................................................................. 35 Table 17: South African Auto Loans Category Size (US$ Billion) 2007–2016 ........................................................................................... 36 Table 18: South African Auto Loans Category Size (ZAR Billion), 2007–2016 ......................................................................................... 36 Table 19: South African Housing Loans Category Size (US$ Billion), 2007–2016 ................................................................................... 37 Table 20: South African Housing Loans Category Size (ZAR Billion), 2007–2016 ................................................................................... 37 Table 21: South African Education Loans Category Size (US$ Billion), 2007–2016 ................................................................................ 38 Table 22: South African Education Loans Category Size (ZAR Billion), 2007–2016 ................................................................................ 38 Table 23: South African Credit Card Transaction Values and Volumes, 2008–2011 ............................................................................... 40 Table 24: List of Foreign Banks in South Africa .......................................................................................................................................... 45 Table 25: Nigerian Consumer Finance Market Outlook (NGN Billion), 2011–2016 ................................................................................... 48 Table 26: Nigerian GDP at Constant Prices (US$ Billion), 2007–2016 (Base Year 1999–2000) .............................................................. 50 Table 27: Nigerian Inflation Rate (%), 2007–2016 .......................................................................................................................................... 51 Table 28: Nigerian Population (Million), 2007–2016 ...................................................................................................................................... 54 Table 29: Nigerian Banking Industry – Key Financial Metrics (US$ Billion), 2007–2011 ......................................................................... 56 Table 30: Nigerian Banking Industry – Key Financial Metrics (US$ Billion), 2012–2016 ......................................................................... 57 Table 31: Nigerian Consumer Finance Market Size (US$ Billion), 2007–2016 .......................................................................................... 59 Table 32: Nigerian Consumer Finance Market Size (NGN Billion), 2007–2016 ......................................................................................... 59 Table 33: Nigerian Personal Loans Category Size (US$ Billion), 2007–2016 ............................................................................................ 60 Table 34: Nigerian Personal Loans Category Size (NGN Billion), 2007–2016 ........................................................................................... 60 Table 35: Nigerian Credit Card Loans Category Size (US$ Million), 2007–2016 ....................................................................................... 61 Table 36: Nigerian Credit Card Loans Category Size (NGN Billion), 2007–2016 ...................................................................................... 61 Table 37: Nigerian Auto Loans Category Size (US$ Billion), 2007–2016 ................................................................................................... 62 Table 38: Nigerian Auto Loans Category Size (NGN Billion), 2007–2016 .................................................................................................. 62 Table 39: Nigerian Housing Loans Category Size (US$ Billion), 2007–2016 ............................................................................................. 63 Table 40: Nigerian Housing Loans Category Size (NGN Billion), 2007–2016 ............................................................................................ 63 Table 41: Nigerian Educational Loans Category Size (US$ Million), 2007–2016 ...................................................................................... 64 Table 42: Nigerian Educational Loans Category Size (NGN Billion), 2007–2016...................................................................................... 64 Table 43: Nigerian GDP Per Capita, Current Prices (US$ dollars), 2007–2016 ......................................................................................... 65 Table 44: Banks in Nigeria ............................................................................................................................................................................... 67 Table 45: Nigerian Banking Models ................................................................................................................................................................ 68 Table 46: First Bank of Nigeria Plc, Key Facts .............................................................................................................................................. 70 Table 47: United Bank for Africa, Key Facts .................................................................................................................................................. 70 Table 48: Guaranty Trust Bank Plc, Key Facts .............................................................................................................................................. 71 Table 49: Zenith Bank Plc, Key Facts ............................................................................................................................................................. 71 Table 50: Access Bank Plc, Key Facts ........................................................................................................................................................... 72 Table 51: Diamond Bank Plc, Key Facts ........................................................................................................................................................ 72 Table 52: Ecobank Group, Key Facts ............................................................................................................................................................. 73 Table 53: Market Entry Strategies of Foreign Banks in Nigeria .................................................................................................................. 75 Table 54: Kenyan Consumer Finance Market Value by Category (KES Billion), 2011–2016 .................................................................. 79 Table 55: Kenyan GDP at Constant Prices (US$ Billion), 2007–2016 (Base Year 1999–2000) ................................................................ 81 Table 56: Kenyan Inflation Rate (%), 2007–2016 ........................................................................................................................................... 82 Table 57: Kenyan Banks Total Assets (KES Billion), 2007–2011 ................................................................................................................ 85 Table 58: Kenyan Commercial Banks Total Deposits (KES Billion), 2007–2011 ...................................................................................... 86 Table 59: Kenyan Consumer Finance Market Size (US$ Billion), 2007–2016 ............................................................................................ 87 Table 60: Kenyan Consumer Finance Market Size (KES Billion), 2007–2016 ........................................................................................... 87 Table 61: Kenyan Personal Loans Category Size (US$ Billion), 2007–2016 ............................................................................................. 88 Table 62: Kenyan Personal Loans Category Size (KES Billion), 2007–2016 ............................................................................................. 88 Table 63: Kenyan Credit Cards Loans Category Size (US$ Million), 2007–2016 ...................................................................................... 89
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Table 64: Kenyan Credit Cards Loans Category Size (KES Billion), 2007–2016 ...................................................................................... 89 Table 65: Kenyan Auto Loans Category Size (US$ Billion), 2007–2016..................................................................................................... 90 Table 66: Kenyan Auto Loans Category Size (KES Billion), 2007–2016 .................................................................................................... 90 Table 67: Kenyan Housing Loans Category Size (US$ Billion), 2007–2016 .............................................................................................. 91 Table 68: Kenyan Housing Loans Category Size (KES Billion), 2007–2016 .............................................................................................. 91 Table 69: Kenyan Educational Loans Category Size (US$ Million), 2007–2016 ........................................................................................ 92 Table 70: Kenyan Educational Loans Category Size (KES Billion), 2007–2016 ........................................................................................ 92 Table 71: Kenyan University Enrollments, 2008–2011 ................................................................................................................................. 93 Table 72: Kenyan Credit Card, 2007–2011 ..................................................................................................................................................... 95 Table 73: Kenyan Banking Sector Market Shares by Assets (%), 2011 ..................................................................................................... 97 Table 74: Kenyan Banking Sector Market Shares by Number of Loan Accounts (%), 2011 ................................................................... 98 Table 75: Kenyan Housing Loan Market – Leading Companies (% Share), 2011 ..................................................................................... 99 Table 76: Barclays Bank of Kenya Ltd, Main Products .............................................................................................................................. 100 Table 77: Kenya Commercial Bank, Key Facts ........................................................................................................................................... 101 Table 78: Representative Offices of Foreign Banks in Kenya................................................................................................................... 103 Table 79: Representative Offices of Foreign Banks in Kenya................................................................................................................... 103 Table 80: Kenyan Car Sales, 2008–2011....................................................................................................................................................... 105 Table 81: Kenyan Interest Rates (%), 2007–2011 ........................................................................................................................................ 106 Table 82: Botswana Consumer Finance Market Outlook (BWP Million), 2011–2016 ............................................................................. 107 Table 83: Botswanan GDP at Constant Prices (US$ Billion), 2007–2016 (Base Year 1999–2000)........................................................ 109 Table 84: Botswanan Inflation Rate (%), 2007–2016 ................................................................................................................................... 110 Table 85: Botswanan Commercial Banks – Total Assets (BWP Billion) 2007–2011 .............................................................................. 114 Table 86: Botswanan Commercial Banks – Total Deposits (BWP Billion), 2007–2011 .......................................................................... 115 Table 87: Botswanan Consumer Finance Market Size (US$ Million), 2007–2016 ................................................................................... 117 Table 88: Botswanan Consumer Finance Market Size (BWP Million), 2007–2016 ................................................................................. 117 Table 89: Botswanan Housing Loans Category (US$ Million), 2007–2016 .............................................................................................. 118 Table 90: Botswanan Housing Loans Category (BWP Million), 2007–2016 ............................................................................................ 118 Table 91: Botswanan Auto Loans Category (US$ Million), 2007–2016 .................................................................................................... 119 Table 92: Botswanan Auto Loans Category, (BWP Million), 2007–2016 .................................................................................................. 119 Table 93: Botswanan Credit Cards Category (US$ Million), 2007–2016 .................................................................................................. 120 Table 94: Botswanan Credit Cards Category (BWP Million), 2007–2016 ................................................................................................. 120 Table 95: Botswanan Personal Loans Category (US$ Million), 2007–2016 ............................................................................................. 121 Table 96: Botswanan Personal Loans Category (BWP Million), 2007–2016............................................................................................ 121 Table 97: Botswanan Education Loans Category (US$ Million), 2007–2016 ........................................................................................... 122 Table 98: Botswanan Education Loans Category (BWP Million), 2007–2016 ......................................................................................... 122 Table 99: Botswana – Three-to-Five-Year Loan Values (BWP Billion), 2007–2011 ................................................................................ 123 Table 100: Botswanan Interest Rates (%), 2007–2011 ................................................................................................................................ 124 Table 101: Botswana – Number of Credit Cards Issued (Thousands), 2006–2010 ................................................................................ 125 Table 102: Botswanan Transactions through POS Terminals (Thousands), 2007–2011 ...................................................................... 126 Table 103: Botswanan Banking Industry – Key Figures, FY2009–FY2010 .............................................................................................. 128 Table 104: Standard Chartered Bank, Botswana, Key Facts ..................................................................................................................... 129 Table 105: Barclays Bank, Botswana, Key Facts ........................................................................................................................................ 130 Table 106: Standard Bank, Botswana, Key Facts ....................................................................................................................................... 131 Table 107: First National Bank of Botswana, Key Facts ............................................................................................................................ 132 Table 108: Bank Gaborone Ltd, Key Facts................................................................................................................................................... 133 Table 109: Letshego Holdings, Key Facts.................................................................................................................................................... 134 Table 110: Botswana – List of Foreign Banks (2011) ................................................................................................................................. 136 Table 111: Annual Exchange Rate, 2007–2016 ............................................................................................................................................ 139
CONSUMER FINANCE MARKET IN SOUTH AFRICA
Emerging Opportunities in the Sub-Sahara Africa Consumer Finance Industry: Market Size, Strategies,
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2 Sub-Saharan Africa – Consumer Finance Market Benchmarking
2.1 Sub-Saharan Africa – Consumer Finance Market Dynamics
This section provides a comparative benchmarking of the consumer finance industry in four key Sub-Saharan African
countries: South Africa, Kenya, Nigeria and Botswana. For the purpose of this report, the consumer finance industry is
divided into five categories: credit card loans, housing loans, auto loans, personal loans and education loans. Among the
Sub-Saharan markets covered in this report, South Africa leads in the consumer finance industry with a total industry size
of US$XXX.X billion, followed by Nigeria which had a consumer finance market of US$XX.X billion in 2011. Kenya is the
third-largest market, valued at US$X.X billion, while Botswana’s is valued US$X.X billion.
Figure 1: Consumer Finance Market Dynamics in Sub-Saharan African Countries, 2007–2016
Nigeria
Kenya
South Africa
Botswana
-5%
0%
5%
10%
15%
20%
25%
30%
35%
0% 5% 10% 15% 20% 25% 30%
Source: BRICdata analysis © BRICdata
CAGR (2007–2011)
CA
GR
(2
01
2–
20
16
)
CONSUMER FINANCE MARKET IN SOUTH AFRICA
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3 Consumer Finance Market in South Africa
3.1 Outlook of Consumer Finance in South Africa
The South Africa consumer finance market is estimated at ZAR1XXX.X billion in 2012, and is projected to reach
ZARXXXX.X billion in 2016, growing at a CAGR of X.XX% over the forecast period. The market is expected to be
dominated by state-owned Absa Bank, Standard Bank, Ned Bank and FirstRand Bank.
The home loans category is expected to continue as the largest category in the consumer finance market over the forecast
period, followed by auto loans, personal loans, credit card loans and education loans. Home loans are expected to
account for XX.X% of the total consumer finance market in 2016 while auto loans are projected to account for XX.X%.
Education loans are expected to be fewer but the sector is expected to grow as more students enroll in schools and
colleges.
Over the forecast period, competition in the car loan category is expected to become fiercer as global car manufacturers
set up financial arms to support their businesses. This is likely to result in lower interest rates, and participants are
expected to follow aggressive marketing strategies to gain market share.
The home loans category is estimated to be ZARXXX.X billion in 2012, and is projected to reach ZARXXX.X billion in
2016. The growth in the category is expected to be largely derived from growing middle class population. Furthermore, the
growth in the construction market over the forecast period is expected to support the home loans category, though it has
huge default rates.
Most banks in South Africa offer credit cards. This trend will continue and there is estimated to be more credit card loans
due to increasing income.
Stringent regulations and tight monetary policy are expected to impact the overall performance of consumer finance in the
review period and this will lead to steady growth in the forecast period.
Table 3: South Africa Consumer Finance Market Outlook (ZAR Billion), 2011–2016
Category 2011 2016
Personal loans XXX.X XXX.X
Auto loans XXX.X XXX.X
Credit card loans XX.X XX.X
Housing loans XXX.X XXX.X
Education loan XX.X XX.X
Total XXXX.X XXXX.X
Source: BRICdata analysis © BRICdata
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3.2 South African Consumer Finance Market Dynamics
3.2.1 Macroeconomic fundamentals
GDP
South Africa’s GDP at constant prices grew from US$XXX.X billion in 2007 to US$XXX.X billion in 2011 at a CAGR of
X.XX% during the review period. One of the major reasons for the sluggish growth was the downturn in the economy
following the global financial crisis during 2008–2009. Over the forecast period the economy is expected to grow at a
CAGR of X.XX% to reach a value of US$XXX.X billion by the end of 2016.
Table 4: South African GDP at Constant Prices (US$ Billion), 2007–2016 (Base Year 1999–2000)
2007 2008 2009 2010 2011
GDP XXX.X XXX.X XXX.X XXX.X XXX.X
2012 2013 2014 2015 2016
GDP XXX.X XXX.X XXX.X XXX.X XXX.X
Source: BRICdata analysis © BRICdata
Figure 8: South African GDP at Constant Prices (US$ Billion), 2007–2016 (Base Year 1999–2000)
Source: BRICdata analysis © BRICdata
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3.3 South African Consumer Finance Market Size and Growth Potential
3.3.1 Overview
South Africa’s consumer finance market recorded strong growth during the review period. This was mainly due to the
banking industry’s robust development and the country’s increasing disposable income. The market was valued at
ZARX.XXX trillion (US$XXX.X billion) in 2011, after increasing at a CAGR of X.XX% during the review period. It is
projected to register a CAGR of X.XX% over the forecast period, to reach a value of ZARX.XXX.X trillion (US$XXX bn) in
2016. The growth will be driven by the country’s improving macroeconomic conditions and rising domestic demand for
consumer finance products.
Table 11: South African Consumer Finance Market Size by Category (US$ Billion), 2007–2016
2007 2008 2009 2010 2011 CAGR 2007–2011
Consumer Finance XXX.X XXX.X XXX.X XXX.X XXX.X X.XX%
2012 2013 2014 2015 2016 CAGR 2012–2016
Consumer Finance XXX.X XXX.X XXX.X XXX.X XXX.X X.XX%
Source: BRICdata analysis © BRICdata
Table 12: South African Consumer Finance Market Size by Category (ZAR Billion), 2007–2016
2007 2008 2009 2010 2011 CAGR 2007–2011
Consumer Finance XXX.X XXX.X XXX.X XXX.X X,XXX.X X.XX%
2012 2013 2014 2015 2016 CAGR 2012–2016
Consumer Finance X,XXX.X X,XXX.X X,XXX.X X,XXX.X X,XXX.X X.XX%
Source: BRICdata analysis © BRICdata
Figure 14: South African Consumer Finance Market Size (ZAR Billion), 2007–2016
Source: BRICdata analysis © BRICdata
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4 Consumer Finance Market in Nigeria
4.1 Future Outlook of Consumer Finance in Nigeria
Personal loans
Personal loans remain the largest category in the consumer finance market with a market share of XX.X% in 2011. The
category is expected to reach NGNXX.X trillion by the end of 2016, growing at a CAGR of XX.XX% over the forecast
period. Increasing per capita disposable income is expected to drive Nigeria’s personal loan category, although increasing
unemployment and high lending rates may have an adverse effect.
Auto loans
According to figures released by the Nigerian Ports Authority on January 2012, a total of XX,XXX cars were imported into
the country in 2011, compared to XX,XXX in 2009. This increase clearly reflects the positive sentiments in the Nigerian
economy, and the growing demand for new cars in the country. With the increase in imports of new vehicles, sales are
expected to grow, and the auto loans category is expected to grow at a CAGR of XX.XX% over the forecast period.
Housing loans
In 2010, in order to boost the demand and supply for the housing finance, the Federal Mortgage Bank of Nigeria eased the
norms for the housing loan by increasing the maximum loan amount per contributor from NGNX million to NGNXX million.
However, the increasing lending rate is expected to affect this move as the Nigerian housing loan category is expected to
grow at a moderate CAGR of XX.XX% over the forecast period.
Credit card loans
Credit cards are not very popular in Nigeria, and only a limited section of the population has access to credit cards.
Increasing fraudulent and forgery-related activity relating to credit cards also restrict most banks from offering these
products in Nigeria. The category is expected to grow at a CAGR of XX.XX% over the forecast period to reach a value of
NGNXXX.X billion by the end of 2016.
Education loans
Nigeria sends the highest number of students to the US than any other country in sub-Saharan Africa, with over X,XXX
students studying at over XXX institutions in the US. These students spend billions of naira on education, and the
education loans category is expected to register significant growth over the forecast period, growing at a CAGR of
XX.XX% to reach at a market value of NGN XXX.X billion by the end of 2016.
Figure 27: Nigerian Consumer Finance Market Outlook (NGN Billion), 2011–2016
Housing Loans
Auto Loans
Credit Card Loans
Education Loan
Personal Loan
0%
5%
10%
15%
20%
25%
30%
35%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
10% 15% 20% 25% 30% 35% 40% 45% 50%
CA
GR
2012–2016
CA
GR
2012–2016
CAGR 2007–2011
Source: BRICdata analysis © BRICdata
CONSUMER FINANCE MARKET IN NIGERIA
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4.2 Nigerian Consumer Finance Market Dynamics
4.2.1 Macroeconomic fundamentals
Inflation rate
Despite impressive economic growth, Nigeria registered high rates of inflation during the review period, rising from X.X%
in 2007 to XX.X% in 2011. The figure is projected to stabilize at X.X% by 2016. Inflation grew rapidly during 2010–2011,
due to an increase in fuel prices.
The following table and figure depict the Nigerian inflation rate for 2007–2016:
Table 27: Nigerian Inflation Rate (%), 2007–2016
2007 2008 2009 2010 2011
Inflation X.X% XX.X% XX.X% XX.X% XX.X%
2012 2013 2014 2015 2016
Inflation X.X% X.X% X.X% X.X% X.X%
Source: BRICdata analysis © BRICdata
Figure 29: Nigerian Inflation Rate (%), 2007–2016
Source: BRICdata analysis © BRICdata
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4.3 Nigerian Consumer Finance Market Size and Growth Potential
4.3.1 Overview
The Nigerian consumer finance market recorded strong growth during the review period, driven mainly by rising income
levels. The consumer finance market in Nigeria valued NGN X.X trillion (US$XX.X billion) in 2011, after increasing at a
CAGR of XX.XX% during the review period. The market is projected to record a higher CAGR of XX.XX% over the
forecast period to value NGNXX.X trillion (US$XX.X billion) in 2016. The growth in the consumer finance market will be
driven by the country’s strong macroeconomic conditions.
Table 31: Nigerian Consumer Finance Market Size (US$ Billion), 2007–2016
2007 2008 2009 2010 2011 CAGR (2007–2011)
Consumer Finance Market XX.X XX.X XX.X XX.X XX.X XX.XX%
2012 2013 2014 2015 2016 CAGR (2012–2016)
Consumer Finance Market XX.X XX.X XX.X XX.X XX.X XX.XX%
Source: BRICdata analysis © BRICdata
Table 32: Nigerian Consumer Finance Market Size (NGN Billion), 2007–2016
2007 2008 2009 2010 2011 CAGR (2007–2011)
Consumer Finance Market X,XXX.X X,XXX.X X,XXX.X X,XXX.X X,XXX.X XX.XX%
2012 2013 2014 2015 2016 CAGR (2012–2016)
Consumer Finance Market X,XXX.X X,XXX.X 1X,XXX.X 1X,XXX.X 1X,XXX.X XX.XX%
Source: BRICdata analysis © BRICdata
Figure 35: Nigerian Consumer Finance Market Size (NGN Billion), 2007–2016
-10%
0%
10%
20%
30%
40%
50%
60%
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Gro
wth
Rate
(%
)
Co
nsu
mer F
inan
ce (N
GN
Billio
n)
Review Forecast Growth Rate
Source: BRICdata analysis © BRICdata
CONSUMER FINANCE MARKET IN BOTSWANA
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Products and Competitive Landscape Page 21
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5 Consumer Finance Market in Kenya
5.1 Kenyan Consumer Finance Market Dynamics
5.1.1 Macroeconomic fundamentals
GDP
Kenya’s GDP at constant prices valued at US$XX.X billion in 2011, recording a CAGR of -X.XX% during the review
period. The country’s GDP is projected to grow at a CAGR of X.XX% over the forecast period, to reach US$XX.X billion in
2016. The increased economic trend and improved business environment is expected to support the growth of consumer
finance market over the forecast period.
Table 55: Kenyan GDP at Constant Prices (US$ Billion), 2007–2016 (Base Year 1999–2000)
2007 2008 2009 2010 2011
GDP XX.X XX.X XX.X XX.X XX.X
2012 2013 2014 2015 2016
GDP XX.X XX.X XX.X XX.X XX.X
Source: International Monetary Fund and BRICdata analysis © BRICdata
Figure 47: Kenyan GDP at Constant Prices (US$ Billion), 2007–2016 (Base Year 1999–2000)
Source: International Monetary Fund and BRICdata analysis © BRICdata
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FDI inflows
FDI inflows suffered as a direct consequence of the global financial crisis. In 2007, Kenya received a total FDI inflow of
US$XXX.X million, whereas in 2008 this figure declined to US$XX.X million. While FDI inflows recovered slightly to reach
US$XXX.X million in 2009 and US$XXX.X million in 2010, it is still significantly below the 2007 level.
Figure 49: Kenyan FDI Inflows (US$ Million), 2007–2010
Source: World Bank and BRICdata analysis © BRICdata
APPENDIX
Emerging Opportunities in the Sub-Sahara Africa Consumer Finance Industry: Market Size, Strategies,
Products and Competitive Landscape Page 23
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6 Appendix
6.1 About BRICdata
BRICdata publishes in-depth strategic intelligence reports that help its customers better understand opportunities in
emerging markets and industry sectors. Its reports provide an independent, expert view supported by primary research
and access to leading data and intelligence sources.
BRICdata is a comprehensive source of insights and analysis, and publishes a broad range of reports across a number of
different industry sectors, including consumer, retail, financial services, technology, telecoms and construction.
BRICdata is headquartered in London with research, analysis and account management teams based across Europe, the
US and Asia-Pacific. Its global research footprint is supported by a network of external associates, data partners and
industry experts to give the clearest possible perspective on emerging markets.
6.1.1 Exchange rate
Table 111: Annual Exchange Rate, 2007–2016
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
US$ - ZAR XX XX XX XX XX XX XX XX XX XX
US$ - NGN XX XX XX XX XX XX XX XX XX XX
US$ - KES XX XX XX XX XX XX XX XX XX XX
US$ - BWP XX XX XX XX XX XX XX XX XX XX
Source: OANDA and BRICdata analysis © BRICdata
6.1.2 Areas of expertise
BRICdata operates a dedicated, multilingual team of in-house industry analysts with significant experience of global and
country-level research. BRICdata also maintains data and research partnerships with other research companies, industry
experts and trade associations, along with a network of independent industry consultants and former industry participants
contributing research and reports to bring additional insight and expertise in more specialist areas.
BRICdata’s research offering spans the following industry areas:
Construction BRICdata publishes reports covering the entire construction value chain: construction materials, equipment, construction
services, architectural services and interior design. It also covers the main value sectors of construction activity:
commercial, infrastructure, industrial, institutional and residential.
This comprehensive view of the market enables BRICdata to detail key growth sectors and countries and identify the most
attractive industry opportunities.
Consumer goods Covering a broad range of areas across the consumer goods market, from interior products to fast-moving consumer
goods (FMCG), ingredients, and packaging, BRICdata offers a comprehensive insight into key consumer sectors across
fast-growing markets, identifying key trends, future innovations and growth opportunities.
Comprehensive data sets including unique primary survey-driven research creates accurate market forecasts and
understanding of the factors driving consumption behavior.
Financial services Providing detailed insights into insurance and banking markets, BRICdata’s financial services reports identify key market
opportunities, emerging technologies and channel strategies. The reports provide unique data combined with local
examples of best practice and expert insights into the market.
Retail BRICdata maintains a comprehensive database of forecasts of retail spending, along with a series of unique indicators
enabling a forward view of retailers’ prospects in emerging markets. The reports identify emerging concepts in retail,
including the nascent online and mobile retail sectors in the BRIC countries and other emerging markets.
Technology BRICdata tracks key trends and innovations, emerging technologies and markets, and the key operators in both emerging
markets and technologies. Covering a range of emerging and disruptive technologies including telecoms, social media,
online and mobile retailing, and telemedicine, BRICdata examines strategies for success, the state of the competitive
landscape and the inherent threats and opportunities in the emerging technological economy.
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Emerging Opportunities in the Sub-Sahara Africa Consumer Finance Industry: Market Size, Strategies,
Products and Competitive Landscape Page 24
© BRICdata. This product is licensed and is not to be photocopied Published: August 2012
6.2 Methodology
All BRICdata reports are rigorously sourced and created according to a comprehensive, two-stage methodology. This
includes internal audit and primary research.
A) Internal audit
Review of in-house databases to gather existing data:
o Historic market databases and reports
o Company database
o projects database
B) Primary research
Review of the latest company strategy and asset management trends
1) Research
A. Sources
Collection of the latest market-specific data from a wide variety of industry sources:
o Government statistics
o Industry associations
o Company filings
o Broker reports
o International organizations
B. Expert opinion
Collation of opinion taken from leading industry experts
Analysis of third-party opinion and forecasts:
o Broker reports
o Industry associations
o Official government sources
C. Data consolidation and verification
Consolidation of data and opinion to create historical datasets
Creation of models to benchmark data across sectors and geographies
2) Research Analysis
Market forecasts
Feed of forecast data into market models:
o Macroeconomic indicators
o Industry-specific drivers
Analysis of Market Databases to identify trends by sector:
o Latest trends
o Key drivers of the market
3) Report Writing
Analysis of market data
Discussion of company and industry trends and issues
Integration of survey results
Annual review of trends
Standardization of market definitions using recognized industry classifications
APPENDIX
Emerging Opportunities in the Sub-Sahara Africa Consumer Finance Industry: Market Size, Strategies,
Products and Competitive Landscape Page 25
© BRICdata. This product is licensed and is not to be photocopied Published: August 2012
4) Quality Control
A. Templates
Detailed process manuals
Standardized report templates and accompanying style guides
Complex forecasting tool used to ensure forecast methodologies are consistently applied
QC checklists
B. QC process
Peer review
Senior-level QC
Random spot checks on data integrity
Benchmark checks across databases
Market data cross-checked for consistency with accumulated data from company filings
6.3 Disclaimer
All rights reserved.
No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form by any means,
electronic, mechanical, photocopying, recording or otherwise, without the prior permission of the publisher, BRICdata.
The facts of this report are believed to be correct at the time of publication but cannot be guaranteed. Please note that the
findings, conclusions and recommendations that BRICdata delivers will be based on information gathered in good faith
from both primary and secondary sources, whose accuracy BRICdata is not always in a position to guarantee. BRICdata
can, therefore, accept no liability whatsoever for actions taken based on any information that may subsequently prove to
be incorrect.