Adrian Pillay, GM, MEA
Current banking/lending landscape: • Appetite for credit always increases during economically challenging times, and it is good to see that the region is able to service this increased demand. Across the entire region, total loans value has grown almost 10% YoY at the end of Q3 2022, with almost 14% in Africa. This is enabled by the rise in lending within the underbanked and unbanked categories, driven by the rapidly growing fintech sector. Africa has seen an almost 150% growth in the number of fintechs operating in the continent since 2021 alone. • In terms of consumer reactions, in a recent study by TransUnion Africa, 60% of households surveyed indicated that they are focused on cutting back on discretionary spending, which is up 4% from the previous quarter. These sentiments are shared across generations (Gen Z: 46%, Millennials: 54%, Gen X: 54%, and Baby Boomers: 57%). How can financial institutions support their customers? • Regular and ongoing Account Management reviews will ensure that lenders effectively track any shifts in the financial positions of their existing customers and are able to quickly respond to any negative indicators – be it in slowing down lending to such customers or reducing OTB lines of credit. For new customers, regular and ongoing reviews of lending strategies will be crucial for lenders to stay ahead of any headwind and ensure that NPLs do not dramatically rise.
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