Tanzania’s CRDB Bank launched a new branch in neighbouring Burundi to capitalise on opportunities brought about by growing trade between the two countries.
This shows that Nigerian and South African banks, which are known for their ambitious growth strategies into the continent, will encounter tough competition as East African banks enter the fray.
In the past, it was thought that South African and Nigerian banks were the only ones that were expanding rapidly in the continent. But the CRDB move shows that has changed.
Analysts told Ventures Africa that if South African banks thought they would ride roughshod over other players in the continent would have to think again.
South African banks, awash with first class infrastructure, are known to think that they do not have any tough competitors in the continent.
With only five percent of the Burundian population of eight million people having a bank account, the landlocked central African nation is seen as a banking frontier, attracting lenders like Kenya’s KCB and Togo-based Ecobank, Reuters reported.
Trade between Burundi and Tanzania has been growing in recent years, mainly because Burundian businesses rely heavily on the Tanzanian port of Dar Es Salaam to import goods.
“People have had to carry chunks of money across the border to trade,” said Charles Kimei, CRDB’s head, in a statement.
Kimei said the bank would turn its attention towards the Democratic Republic of Congo, a vast, mineral-producing central African country that lacks a developed banking sector.