Banking - Burundi

Burundi

In 2024, the Banking market in Burundi is expected to witness a significant increase in Net Interest Income, reaching US$379.40m.
Traditional Banks are projected to dominate this market, with a substantial market volume of US$379.00m by 2024.
Looking ahead, the Net Interest Income is anticipated to display a steady annual growth rate (CAGR 2024-2029) of 5.09%, resulting in a market volume of US$486.40m by 2029.
When compared globally, it is noteworthy that China is expected to generate the highest Net Interest Income, amounting to US$4,332.0bn in 2024.
This clearly demonstrates the immense potential and competitiveness of the Banking market sector in Burundi, as it strives to establish its presence in the global market.
The banking sector in Burundi is experiencing a shift towards digital banking solutions to overcome challenges in infrastructure and reach rural populations.

Key regions: United States, China, Japan, Brazil, United Kingdom

Definition:

The Banking market refers to the financial services sector providing financial products and services to individuals and businesses. Retail banking focuses on offering financial services to individual consumers, such as personal loans, savings and checking accounts, credit cards, and mortgages. Commercial banking, on the other hand, provides financial services to small and large businesses, including loans, lines of credit, and other financial products designed specifically for businesses.

Structure:

The market consists of two segments:
- The Traditional Banking market refers to the financial services sector that provides a range of financial products and services to individuals and businesses through store-based branches and other traditional channels.
- The Digital Banking market refers to the emerging market for digital-only banks that offer financial services through online and mobile platforms.

The market data comprises Net Interest Income, Bank Account Penetration rate, the value of Deposits, the number of depositors, the value of Loans, the number of borrowers, Credit Card Interest Income, the number of ATMs as well as the number of Bank Branches.

Additional information:

The Banking market is highly competitive and characterized by the presence of large global players as well as regional and local banks. Banks are continually seeking ways to improve their offerings and remain competitive by leveraging technology and offering innovative financial products and services. Additionally, changes in regulations and the growing trend toward digitalization are shaping the Retail & Commercial banking market, creating opportunities for new entrants, and forcing existing players to adapt.
Key players in this market are companies such as the Industrial and Commercial Bank of China Ltd., JPMorgan Chase & Co., and HSBC Holdings.

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Analyst Opinion

The Banking market in Burundi has been witnessing significant developments in recent years, reflecting the changing preferences of customers and unique local circumstances.

Customer preferences: Customers in Burundi are increasingly seeking convenient and accessible banking services. This has led to a growing demand for digital banking solutions such as mobile banking and online transactions. As customers look for ways to simplify their banking experience, financial institutions in Burundi are focusing on enhancing their digital offerings to meet these evolving preferences.

Trends in the market: One notable trend in the Burundian banking market is the expansion of microfinance institutions. These institutions play a crucial role in providing financial services to underserved populations, particularly in rural areas. As the government and international organizations continue to promote financial inclusion, microfinance institutions are expected to play an increasingly important role in the banking sector in Burundi.

Local special circumstances: Burundi's banking sector faces unique challenges, including political instability and a relatively underdeveloped financial infrastructure. These factors have influenced the growth and operations of banks in the country. Additionally, the high levels of poverty and limited access to traditional banking services have spurred innovation in the sector, leading to the emergence of alternative financial solutions tailored to the local market.

Underlying macroeconomic factors: The macroeconomic environment in Burundi, characterized by factors such as inflation, foreign exchange rates, and government policies, significantly impacts the banking sector. Economic stability and regulatory reforms are essential for the sustainable growth of banks in Burundi. As the country continues to address these macroeconomic challenges, the banking sector is expected to evolve further to meet the changing needs of customers and adapt to the dynamic business environment.

Methodology

Data coverage:

Data encompasses B2B and B2C enterprises. Figures are based on Net Interest Income, Bank Account Penetration rate, the value of Deposits, the number of depositors, the value of Loans, the number of borrowers, Credit Card Interest Income, the number of ATMs as well as the number of Bank Branches.

Modeling approach / Market size:

Market sizes are determined by a combined Top-Down and Bottom-Up approach, based on a specific rationale for each market segment. As a basis for evaluating markets, we use data provided by the IMF, World Bank and the annual reports of the top 1000 Banks by asset size. Next we use relevant key market indicators and data from country-specific associations such as GDP, deposit interest rates, lending interest rates or bank account penetration rates. This data helps us to estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the particular market. For example, the S-curve function and exponential trend smoothing are well suited to forecast financial services for digital as well as traditional products and services.

Additional Notes:

The market is updated twice per year in case market dynamics change.