Gabon: Bringing banking to the people
Gabon’s formal financial penetration is set to deepen in the coming months thanks in part to a concerted effort by banks to expand retail banking services. The launch of a recent joint venture to provide mobile banking services, along with plans by a number of banks to increase branch networks and the expected launch of a post office bank, will help lay the groundwork to significantly increase Gabon’s banked population.
Gabon telecoms operator Bharti Airtel launched a joint venture with BGFIBank in February 2012 to provide mobile banking and money transfer services throughout the country. Launched under the name “Airtel Money” in late March, the plan – which does not require a bank account – allows subscribers to send and receive money, deposit and withdraw cash, purchase airtime credit, and pay bills for goods and services.
Airtel executives have told local media that a network of up to 150 partner institutions – including petrol stations, stores and supermarkets – will accept payments from Airtel mobile accounts. Petro Gabon, Prix Import supermarkets and some pharmacies in Libreville began participating in the programme during its testing phase. Transaction fees, which vary between CFA100 (€0.15) and CFA2500 (€3.8), pay for the programme’s costs.
Mobile money services have become increasingly popular in Africa, where mobile phone penetration far outstrips formal financial penetration. One of the better-known initiatives is Kenya-based Safaricom’s MPESA programme, which was launched in 2007 and handles more than $4bn annually. Its success has spawned similar projects elsewhere, such as Yoban’tel in Senegal – which is run by a consortium including mobile operator Tigo and Société Générale – or MTN’s Mobile Money in Ghana, which is operated in conjunction with a number of local banks.
On the whole, mobile money services offer the potential to overcome the principal obstacles to growth in the banking sector, which are compounded in Gabon by a comparatively small and decentralised population. Mobile money services also provide positive impacts for the rural employment market, providing an efficient way for companies to hire and pay workers in more isolated areas.
This is where Gabon’s dynamic mobile phone market should provide an efficient way of reaching lower-income and rural residents. The number of mobile phone subscribers jumped from 53.7% of the population in 2005 to 106% by 2010, compared to roughly 15% of the population that has access to formal banking services. The mobile numbers may be somewhat inflated due to the widespread practice of owning several phones to get the best coverage and rates, but even conservative estimates nonetheless put market penetration levels close to 90%.
However, while the number of banking facilities has increased in recent years – from 2005 to 2009, the number of commercial bank branches per 100,000 adults rose from 3.57 to 4.69, and the number of ATMs per 100,000 adults rose from 5.35 to 8.62 – access to formal banking services remains relatively limited throughout much of the country.
Some of the largest banks by market share of deposits and loans, including BGFIBank, the Commercial and Industrial Bank of Gabon (BICIG) and the Gabonese Union of Banks, have thus turned to online banking services. Clients can manage their accounts, send transfers and order checks via the internet.
However, with an internet penetration rate hovering around 12%, the audience for such services remains limited. The arrival of new fibre-optic cables projected for late 2012 should increase the number of internet subscribers, including in the interior, but mobile banking services should provide more of a short-term boost for the sector, given the cell phone market saturation.
Another promising development for the traditional banking sector is the expected launch of Postebank, a unit of the Gabonese post office, La Poste, which has 73 offices around the country. Postebank currently offers basic services including checking and savings accounts and Western Union money transfers, but is set to launch full banking services in 2012 for both retail and business clients, including ATM and credit card services.
“Yet banking activities were traditionally concentrated in Libreville and a few provinces. The 45 new branches of the Postebank will help in making traditional banking services more accessible in the capital and in the provinces. This strategy of proximity will provide access to a larger part of the low-income population and, consequently, improve the banking penetration rate,” Télesphore Obame, the vice-president of global markets at Citibank Gabon, told OBG.
If operators are able to meet the staffing needs of their expansion programmes, the introduction of new bank branches and new, innovative services to engage the unbanked population bode well for the development of the financial sector.