FRENCH bank Societe Generale is betting on a new digital wallet called ‘YUP’ to help meet its target of doubling retail clients in sub-Saharan Africa to 2 million by 2020.
France’s second-biggest listed bank is seeing double-digit revenue growth in sub-Saharan Africa and is one of the few international banks to embark on expanding in retail banking in the region.
Several of its peers, such as Barclays and Credit Agricole, have in contrast announced plans to exit or retreat from the continent to focus on core markets.
SocGen says that as banks in the region deal with less than 20 percent of the population, Africa could yield rapid growth from a low base.
‘It’s this population, 82 percent, that would make Societe Generale’s activities grow,’ Alexandre Maymat, head of the Africa/Asia/Mediterranean Basin & Overseas region, told journalists.
It has launched YUP specifically for the African market and introduced it in Ivory Coast and Senegal this year, with plans to roll it out in four more countries by the end of 2018.
The wallet, built on technology from French start-up firm TagPay, allows customers to transfer money, receive cash and pay bills with a mobile phone.
SocGen aims to earn money from commissions on transactions, as well as loans and savings products it plans to introduce later for YUP.
It is in the bank’s interest to promote non-cash transactions since the cost of holding and operating with cash in Africa amounts to 10 percent of overall costs – much more than in Europe. SocGen expects YUP to break even in three years, Maymat said.
SocGen will detail its ambitions in Africa when it releases an overall group strategy plan in November, and Maymat said revenue growth trends would remain at double digits in sub-Saharan Africa.
Economic growth in sub-Saharan Africa is expected to pick up this year, according to the International Monetary Fund, from a more than two-decade low in 2016 when commodity exporters faced lower prices.
However, in non-oil producing countries such as Cote d’Ivoire and Kenya – where SocGen is present – growth is expected to remain solid at over 5 percent.