5 challenger banks booming in the African continent

By Pavithra R

The banking sector is experiencing a dynamic shift globally with Challenger Banks emerging and competing to traditional banks and capturing market shares.

These emerging market challenger banks will have to look carefully at the market conditions, target segments, possible and sustainable revenue sources, the regulatory structure that best supports the desired business model, and product offerings that pave the way for engagement and rapid growth. 

Below mentioned is a list of 5 noteworthy challenger banks in Africa.

Carbon (2012)

HQ: Nigeria

Carbon by the Nigerian parent company OneFi, is a simple mobile platform for payments, bills, smart investments, credit reports, and instant loans to help cover unexpected expenses or urgent cash needs. It is compatible with both iOS and Android.

Carbon belives that access to credit and quality financial services is a human right. Its mission is to empower all people with the financial access they need to pursue a life of dignity and prosperity. The firm empowers individuals with access to credit, simple payments solutions, high-yield investment opportunities, and easy-to-use tools for personal financial management. Interest ranges from 1.75% – 30%, with an equivalent monthly interest rate of 1 – 21%. The Annual Percentage Rate (APR) on a Carbon loan ranges from 23 – 60.8%. The company recently launched its services in Kenya and is expanding its footprint to additional African countries.

Discovery Bank (2019)

Hq: South Africa

Insurance firm Discovery Ltd. soft-launched Discovery Bank in March 2019. Being the world’s first behavioral bank, its main goal is to improve your financial health. The challenger bank guides, motivates, and rewards users so as to become financially healthier. Discovery Bank believes in incentivizing users to make better financial decisions, which in turn will generate higher savings levels, lower risk, and increased wealth for society as a whole.

According to Discovery Bank, five behaviors can help people become financially healthier. By changing just five controllable behaviors, people can materially improve their financial position and meet their financial obligations.

TymeBank (2015)

Hq: South Africa

TymeBank’s majority shareholder is African Rainbow Capital, a fully black-owned and controlled investment company, making TymeBank the first majority black-owned retail bank in South Africa. It is a digital retail bank founded on simplicity, transparency, and affordability. It shares partnerships with Boxer and Pick n Pay to get access to a strong distribution network in the locations that it’s targeting.

Vista Bank

HQ: Guinea

Vista Bank (Vista) is a new bank for a new generation. It is a financial services holding company with the objective to build a world-class pan-African financial institution group and contribute to economic and financial inclusion in Africa. The bank aims to optimize the opportunities in its markets in order to become the financial institution of the first choice through innovative banking and insurance products.

Vista Group has established partnerships with several international financial institutions in order to implement its growth strategy in the MSME sector (SME banking, leasing, mesofinance, women banking), trade, and chain finance.

FairMoney (2017)

HQ: Nigeria

FairMoney is a platform that helps people access instant loans within 5 minutes through its agents and android app. The challenger bank is building the leading mobile bank for emerging markets.

Also read: 5 challenger banks booming in the Americas