On a continent that carries a disproportionate share of many diseases from HIV-AIDS to high blood pressure, access to finance poses a major challenge to the small clinics that serve so many lower and middle class Africans. These clinics often struggle to access even small amounts of credit to maintain or expand their facilities.In a recent post on this blog, Jason Lamb discussed the problem of financial exclusion in Sub-Saharan Africa, where almost 80 percent of the population lacks access to basic financial services like a checking or savings account. But it is important to note the individuals are not the only ones left out of the supposedly mainstream financial system. Small businesses also struggle to access credit and when the small business is a health clinic, the problem impacts not only economic health, but the overall health of a community.

The European Commission has created tools for analysis and monitoring, but is also committed to collecting data on the prevailing conditions in the loan and equity finance markets in order to make European financial markets more responsive to the needs of small businesses.

Using data from Bank of Zambia reports, the following graphs provide some interesting insight relating to the degree of financial deepening in Zambia. Between 2009 and 2010, accessibility to, and use of mobile phone banking doubled in size and by far outperformed other technical infrastructure. This trend mimics the popularity of the varied use of mobile phones in Sub-Sahara Africa. There is still potential for growth of internet banking. The numbers point to opportunities in telecommunications development that are much needed in Zambia. ATMs and Point-of Sale (POS), perhaps owing to associated transaction fees pare in comparison to use of mobile banking and internet banking.

Banks and other financial services companies have a great challenge ahead of them to survive the digital disruption. But Kosta Peric – Deputy Director ofthe “Financial Services for the Poor” initiative at the Bill & Melinda Gates Foundation – says banks still have the chance to create the truly innovative customer experiences that will allow them to thrive. 

This movie shows deep disruptions to the real world brought by the parallel, networked digital world. It talks about different ways the technology is changing us - digital money (rather than cash), crowd sourcing as a way of investing (rather than the traditional exchanges), online value and trust and reputation (based on social network connections rather than real world credit ratings).

It’s a fascinating time to be active in the small business lending market. There is a tremendous amount of activity and innovation from new and existing small business lenders in the market. Almost every week, I hear about how lenders are creatively figuring out new ways to offer more loans to small businesses.

While Kenya’s mobile money success story continues to garner attention and showcase the promise of digital financial services, a different story lives right next door. In Ethiopia, a contrasting situation exists, given the nation’s history, geography, and infrastructure. The landlocked country has the second largest population in Africa, with most people living in rural areas in an economy driven by agriculture. A large portion of the adult population remains unbanked. In a country with a population of over 80 million, 45 million are of working age and 34 million are under the age of 14. However, 92%-95% of the adult population does not have access to financial services, despite the presence of 18 commercial banks and over 30 microfinance institutions.

I recently provided a supply side snapshot of financial services in Zambia. This piece presents the demand side view as a follow up to what will eventually become a series of descriptive statistics and facts about the financial services sector in Zambia. The series will also address financial challenges and opportunities for micro, small and medium enterprises (MSMEs) operating in both the formal and informal sectors and across gender lines.

My business, Mavuno Seed, is a seed company based in Nairobi, Kenya with the mission to provide quality seeds for crops at affordable prices to enhance sustainability of farmers, contribute to food security and improve the health of families. Mavuno Seed is the first woman-owned seed company in Kenya. I was inspired to start my own business because I wanted to be free to make decisions in areas that would help small-holder farmers, many of whom in Kenya are women.

Closing the Credit Gap for Formal and Informal Micro, Small, and Medium Enterprises reports on the state of the MSME finance gap based on data from the IFC Enterprise Finance Gap Database, with a focus on informal enterprises based on the research findings presented to the IFC SME and Jobs Committee.