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4 charts on banks, mobile money and financial inclusion in emerging markets

Africa has long been touted as the continent whose specific geographical challenges and the widespread poverty of many of its inhabitants have enabled it to skip over traditional banking infrastructures into the waiting arms of cost-efficient fintech solutions.

The statistics, for those who are rooting for a cashless, bankless Africa, are encouraging. The following charts, sourced from a recent report on financial inclusion in emerging markets published by the institute of international finance, demonstrate that the economy is Africa is starting to pick up, along with mobile phone ownership.

Rising incomes means more people will be interested in banking services for the first time.
Rising incomes means more people will be interested in formal banking services for the first time.

The Boston Consulting Group estimated that by 2019 400 million people in the region earning at least $500 a year will own mobile phones. However, only 150 million of those will hold a traditional bank account, leaving the other 250 million ripe for mobile money disruption. This situation is already starting play out in sub-Saharan Africa: recent research by the Groupe Spécial Mobile Association shows that 34% of adults in the region had mobile money accounts in 2015, and 10% of all adults in the region held a mobile account.

Still, in spite of the excitement  surrounding the social inclusion mobile money’s bringing to Africa, the reality is much the same there as anywhere else: fintech may be doing exciting things with technology, but banks aren’t going anywhere. 

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Mobile money accounts aren’t exactly threatening the banks, even in developing countries.

According to an analysis from the Global Findex, 2.2 billion, or 95 percent, of the total 2.3 billion adults in low- and middle-income countries with a financial account held the account at a financial institution in 2014.

Moreover, contrary to popular belief, financial incumbents are major drivers of economic inclusion in developing countries.

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Of the 721 million accounts opened by adults between 2011-2014, 90 percent were opened with financial institutions, a trend that holds true for low- and middle-income countries as well.

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Banks have a number of reasons aside from profitability to expand their activities in emerging markets, such as CSR and investment. Whatever the cause, the way forward for banks in developing countries will probably start with cellphones, smart or otherwise.

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Tradestreaming Panorama (week ending September 18, 2011)

Every week, I send out an exclusive email (free) to my subscribers summarizing the events of the past week.  It’s everything about the intersection of technology, social media and investing.

Sign up in the sidebar, at the end of this post, or by going here.

Bogle’s Blunders, intellectual honesty and historical perspective (Dorsey Wright):
To the guys at technical analysis shop, Bogle appears as a rigid idealist and someone unwilling to admit that his ideas might have seen their time.  Apparently, Bogle believes investors only misuse ETFs and not index funds.

Should investors overweight companies with overweight CEOs? (Time):
Turns out fat CEOs equal fat profits according to a study in Psychological Today. There seems to be correlation between the width of CEO faces and financial performance. It’s like going long blockheads — but hey, the study posits all types of reasons for this (aggressiveness, imposing people don’t get as much pushback, etc.)

Continue reading “Tradestreaming Panorama (week ending September 18, 2011)”

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How to invest in emerging markets as a foreigner [free ebook]

How does a foreigner invest in some of the most compelling emerging markets in Asia and the Middle East?   Which geographies should investors be looking seriously at?

I don’t know — but Saudi Price Alaweed does.  And recent guest on Tradestreaming, Jeff Towson does. See my interview with Towson here and here.

He’s also written a book about global investing, What Would Ben Graham Do Now: A New Value Investing Playbook for a Global Age.

He was head of direct investments in the Middle East and Pacific for Alaweed’s barebones (staff of 2 or 3 people), multi-billion dollar, global investment machine.

The Tradestreaming global investing ebook

Continue reading “How to invest in emerging markets as a foreigner [free ebook]”

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The Emerging Markets Blueprint for Investors

As the U.S. continues its internal struggles over the financial direction of the company, investors are focused overseas more and more.

Why?

That’s where the growth is.

Well, and it’s also getting easier to access emerging markets with new funds, strategies, research, etc.

I wrote a post over at Wealthfront about ways to access emerging markets beyond BRIC.

And it got me thinking — I could use a one page investment resource for emerging markets.  So here that is… Continue reading “The Emerging Markets Blueprint for Investors”

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How Saudi Prince Waleed invested globally and grew $30k to $22B — with Jeffrey Towson (transcript)

tradestream radio, discussing investing and technology

On Tradestreaming Radio, we’re interviewing lots of innovative entrepreneurs, investors, and researchers all trying to make investors better at what they do. Check out our archives. Subscribe on iTunes. The podcast itself can be heard in its entirety here.

Transcript purchased from SpeechPad

Announcer: Live from the Internet, it’s Tradestreaming Radio, with your host, Tradestreaming.com’s own Zack Miller.

Zack: Hey, this is Zack Miller and you’re listening to Tradestreaming Radio, our place on the Internet where investors learn directly from experts. We’ve got a great show today. We’ve got Jeffrey Towson, the author of “What Would Benjamin Graham Do Now?” Towson was Head of Direct Investments, Asia Pacific and Middle East for Prince Waleed of Saudi Arabia, who is the world’s fourth wealthiest person. He manages a portfolio of over $22 billion, and Towson worked for him for many years, having grown up in the States. Lived overseas and was very much involved in direct investments, buying up properties, investing directly into companies.

His book is a really interesting take, because for many years, obviously, U.S. investors have recognized that there is the rest of the world, and it’s getting more and more interesting. Unfortunately, the way we do it is somewhat, according to Towson, very contorted. Buying a multinational that has exposure to the Middle East is one way to play this game, but obviously not the best. So, in his book, he lays out sort of a framework for investors of any sort, whether they’re retirement investors or professional investors, private equity guys, hedge fund managers, who really want to understand and learn from a framework of how to do business in the Far East. He lays it out in this book.

It’s a very good book. The book, in fact, is probably more suited for the classroom, but it was a very informative read. Lots of interesting anecdotes, and to me, the most interesting thing about the entire enterprise is how Waleed grew his business from a $30,000 loan from his father into a $22 billion investment portfolio, really with two or three staff. It’s a bare bones operation, yet he has his hands in investments all over the world. Being able to understand that model, to me, was really one of the most interesting takeaways from this book. Continue reading “How Saudi Prince Waleed invested globally and grew $30k to $22B — with Jeffrey Towson (transcript)”

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How Saudi Prince Waleed invested globally and grew $30k to $22B — with Jeffrey Towson (podcast)

building an investing empire

Saudi’s Prince Waleed took $30k and investing globally, turned it into $22 billion — all with staff of only 2 or 3.

by Jeff Towson

He was able to accomplish this by applying a framework to invest globally. Like Buffett, Waleed is a value investor. But the similarities end there — Waleed is a deal maker, on the prowl to see where he can add value and how.

In this podcast, we’re joined by Jeff Towson, who was Head of Direct Investments Middle East/North Africa and Asia Pacific for Waleed** for almost 10 years. He’s written a new book describing the Waleed model, What Would Ben Graham Do Now: A New Value Investing Playbook for a Global Age. He explores the essential question of our day: how does a foreigner properly invest in emerging markets? Continue reading “How Saudi Prince Waleed invested globally and grew $30k to $22B — with Jeffrey Towson (podcast)”