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Five Million People in Five Years: Bank-Building in Africa

By Opportunity International

Last Wednesday, Opportunity staff and supporters gathered for the quarterly conference call hosted by the Board of Governors. The topic was “Bank-Building in Africa” and Opportunity’sBanking on Africa campaign, a discussion led by two of our experts in the International Business Development department: Dennis Ripley, SVP of  programs, and Simona Haiduc, VP of program management. Young Ambassadors for Opportunity (YAO) member Ed Kashmarek got a chance to join in and he shares an overview of some of the notable pieces of information he learned on the call:

Opportunity International has a bold vision to bring life-changing financial services to five million impoverished people in sub-Saharan Africa over the next five years, where less than 10% of the population has an account with a financial institution. In 2008, Opportunity launched the Banking on Africa campaign to help develop an array of financial services that address the capital infrastructure needs of communities isolated from the financial system. For more, visit:opportunity.org/bankingonafrica.


  • Banking on Africa focuses on rural families because 75% of people in Africa live in rural areas, and most of those are farmers.
  • People need access to microfinance safety nets like loans, savings, and microinsurance because short-term economic setbacks can lead to long-term problems for households in poverty.
  • Savings accounts are in extremely high demand enabling people to better prepare for their futures.

They are expanding this model in certain countries, such as with agricultural finance program in Malawi. The goals:

  • To reach every family within 60 minutes of their homes, more recently aiming for 20 minutes
  • Expansion of big branches, with smaller satellite branches in small villages
  • Banking kiosks and ATMs
  • Mobile banking vehicles are used to test demand before setting up kiosks
  • Six mobile banking vehicles are already in usein Malawi

Two technology breakthroughs:

1. Point-of-sale (POS) devices:

  • In retail shops (food stores, gas stations, post office)
  • Less costly than brick-and-mortar banks
  • Convenience and security of biometric smart cards to: make a loan payment, draw down from a loan, make deposits
  • Transfer between accounts
  • Reduction of transaction costs: branch banks $2.00, POS $0.20, cell phone banking $0.05 (lower for POS and cell phone banking due to fewer overhead costs like buildings or employees)

2. Mobile phone banking: Mobile phone ownership in Africa is growing fast. With an estimated 15 million mobile phone banking customers with Safaricom carrier alone, there is the potential to reach 90-95% of country in cost-efficient manner

Agricultural finance can be risky, and most commercial banks steer clear as a result. So key components of Opportunity’s agricultural finance program involves strategies to mitigate risks:

  • GPS mapping of land to accurately determine land size
  • Questionnaires to determine family size, cash flow of household to understand the financial situation, potential or limitations, of the family and determine appropriate loan levels
  • Lend to borrowers with a good credit history with Opportunity
  • Don’t over-indebt borrowers (protect borrowers)

Two of our major strategic partners in this program are the Gates Foundation and theMasterCard Foundation. These foundations don’t push for certain directions, allow Opportunity flexibility and spend time on the ground seeing Opportunity’s work firsthand, and they have a good alignment with Opportunity philosophy and strategies. They want to see continued focus on access to savings accounts for rural families, and an emphasis on moving small farmers from subsistence to commercial farming–want to do projects well, at scale, in a sustainable manner.

Opportunity’s due diligence before starting a bank in a country:

  • Thorough market assessment, entry strategies
  • Entry strategies specifically tailored for different countries
  • Discussions with central bankers
  • Acquiring deposit-taking license to get access to cheap funds
  • Access capital markets once bank is sustainable
  • Research and development on how to better reach clients

Opportunity fundraising goal for 2012: $384 million–

  • $220 million from client deposits ($50 million raised so far)
  • $124 million from donors ($109 million raised so far)
  • $40 million from loans ($24 million raised so far)


Ways to make an impact in Africa:


  • Start an online fundraiser for Banking on Africa at OptINnow. Go tooptinnow.org/fundraisers.
  • Join a Country Champion Team. Contact the VP of donor experience, Wendy Cox, for more information.
  • Travel on an Insight Trip to Africa. Visit opportunity.org/insight to learn about trips to Tanzania, Uganda, Kenya, Rwanda and Malawi in 2011.

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