Banking - Zambia

Zambia

In 2024, the projected Net Interest Income in the Banking market of Zambia is expected to reach US$232.00m.
The market is currently dominated by Traditional Banks, with a projected market volume of US$219.00m in 2024.
Looking ahead, the Net Interest Income is expected to grow at an annual growth rate (CAGR 2024-2029) of 18.80%, resulting in a market volume of US$549.00m by 2029.
When compared globally, China is expected to generate the highest Net Interest Income with US$4,332.0bn in 2024.
Despite the challenges faced by the Zambian banking sector, it is currently experiencing a rise in digital banking adoption among the urban population.

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 Zambia is experiencing significant growth and transformation in response to changing customer preferences and local special circumstances.

Customer preferences: Customers in Zambia are increasingly demanding more convenient and efficient banking services, leading to a rise in digital banking solutions. The preference for mobile banking and online transactions is being driven by the need for accessibility and ease of use, reflecting a global trend towards digitalization in the banking sector.

Trends in the market: One noticeable trend in the Zambian banking market is the expansion of financial inclusion initiatives, aimed at providing banking services to underserved populations. This trend is in line with efforts to promote economic development and reduce poverty levels in the country. Additionally, there is a growing focus on sustainable banking practices, with banks incorporating environmental and social considerations into their operations.

Local special circumstances: Zambia's banking market is also influenced by unique local factors, such as the country's economic stability and regulatory environment. The stability of the economy plays a crucial role in shaping the banking sector, as it impacts factors like interest rates, inflation, and overall investment climate. Moreover, regulatory policies set by the Bank of Zambia have a significant impact on the operations and growth strategies of banks in the country.

Underlying macroeconomic factors: The development of the banking market in Zambia is closely linked to broader macroeconomic factors, including GDP growth, inflation rates, and foreign direct investment. As the economy continues to grow and diversify, there are increasing opportunities for banks to expand their services and customer base. Additionally, factors such as political stability and currency exchange rates also play a role in shaping the overall banking landscape in Zambia.

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.