JOHANNESBURG — For Princess Moyo, who lives in a shack in a Johannesburg settlement infamous for poverty and crime, the bank account she opened several months ago means security.
"In Diepsloot, there's lots of criminals," she said. "If they break into my house, they won't find money. The money's in the bank."
Not long ago, banks here were unconcerned with providing services for people like Moyo, a 34-year-old with an easy smile. But banks across Africa increasingly see opportunity in the slums.
The spread of mobile phones has made it easier for the poor of the continent to maintain bank accounts. Africa's middle class is growing, too, and millions of people need a way to amass and maintain their money.
African banks, which have attracted international attention for resilience in the difficult global economy, are also providing advice on multi-billion-dollar deals involving foreign companies looking for business on the continent.
Late last year, one of Africa's largest banks, Standard Bank of South Africa, announced it had secured a $125 million loan from 18 banks around the world, a demonstration of the confidence of foreign investors.
Most African banks had little exposure to the global risks that have weakened Western banks, said African Development Bank chief economist Mthuli Ncube. Instead, he said, they have expanded beyond their borders within the continent.
They have found plenty of business. The economies of sub-Saharan Africa
are expected to grow 5.5 percent this year. That is second only to Asian developing countries, which are expected to grow 7.3 percent. The global average is 3.3 percent.
The number of Africans with enough disposable income to be called middle-class has been increasing about 3.8 percent a year since the 1980s, Ncube said, slightly ahead of population growth. Banks and other business see a market there.
Among the poor, Kenya has been a hub for financial innovations. When the telephone company Safaricom introduced M-Pesa in 2007, it was the first mobile money transfer system of its kind.
Now M-Pesa — pesa means money in Swahili — "is part of the local parlance, and it means money transfer," said Anthony Mwai, IBM's manager for East Africa. IBM has been expanding business with African banks.
In a practice now common around the world, users load money onto their phones at small brokers or from bank accounts. Then they use it to pay rent or bills, or send money to another M-Pesa user, who can visit a broker to get cash.
Banks that once saw M-Pesa as competition have gone into partnership with Safaricom. Such innovations have allowed banks to reach customers without building branches in places like Diepsloot.
For the most part, African banks haven't experienced problems that befell their Western counterparts.
Ncube, of the African Development Bank, said African central banks are generally cautious, perhaps because many African economies have been through painful restructurings at the hands of the International Monetary Fund, something some European economies are now confronting. Banking regulations reflect the caution, and African banks have kept a tight rein on lending.
The poverty of many African countries has meant their economies and banks are somewhat isolated from global trends, while China's growing appetite for raw materials has benefited African producers of minerals and timber.
Still, in 2009, Nigeria's central bank had to provide a $2.55 billion bailout for troubled banks. Analysts blamed lax regulations exploited by corrupt bankers. Ncube insisted that Nigeria's central bank did the right thing in the end.
The banks are healthier today and preparing for more growth.
Last year, IBM signed 20 deals worth $200 million to provide services for banks across Africa. IBM's Africa business has grown by double digits over the past three years, "and the growth we see, we see continuing," spokesman Jonathan Batty said.
Banks have asked for IBM's help modernizing their computer networks to handle more customers and to connect with customers through mobile phone banking and other technology, said Mwai, IBM's manager for East Africa.
In 2009, a government-backed project culminated in a high-speed undersea cable connecting East Africa with the rest of the world, and banks were among those to benefit from increased Internet speeds and lower costs.
Zweli Manyathi, an executive with South Africa's Standard Bank, says banks now need to put their ingenuity to work developing small business, to ensure more of the economic growth that has made the African financial sector attractive.
Manyathi is calling on banks, government and aid groups to find innovative ways to train fledgling businesspeople, many of whom in Africa lack the skills to identify markets, predict costs or take other steps to turn their ideas into thriving enterprises.
For Manyathi, it's not just a matter of business, but part of what he says should be a national and even continentwide campaign against poverty to match past victories over colonialism and despotism.
Manyathi said banks have been complacent, satisfied with their existing business clients.
First National Bank executive Line Wiid said a similar complacency at first kept banks from reaching out to consumers with low incomes. When room for growth in the middle and upper classes was exhausted, not everyone saw opportunity among the poor, or understood how to exploit it, she said.
Wiid remembers that in 2004, when she took over a new unit of the South African bank that targeted low-income earners, colleagues asked, "Are you insane?"
The unit Wiid leads was created out of parts of other bank divisions that had been losing money. Last year, Wiid's profits were 1.45 billion rand, or about $190 million. And with an estimated one-third of adult South Africans still without bank accounts, the potential for more growth is clear.
Lebo Motshegoa, a South African market researcher who specializes in black consumers, said the poor have been waiting for banks to reach out to them. For some, he said, a bank card is a status symbol. But banking charges are a barrier, perhaps more psychological than financial, he said.
"People are saying, 'Why is the bank taking my money? They aren't helping me earn it?'" Motshegoa said. "The corporate answer is, 'You are assessing my infrastructure.' But people don't see it that way."
Moyo, the Diepsloot shack-dweller, pays 11 rand (less than $2) a month for her account, plus 5 rand for every withdrawal. Her family income is low and uncertain, depending on how many day jobs her husband, a plasterer, can find and her own occasional earnings as a seamstress. She says her family earns about 2,800 rand (less than $400) a month.
Her account isn't just safe. It's convenient. Moyo said her husband sometimes finds work far from home, and will camp out at a construction site instead of coming home every evening. Before she had an account, he had to come home to give her his cash earnings. Now, he can make electronic deposits from wherever he is.
Moyo is thinking about opening a savings account for her 5-year-old son, so the family can put money aside for him.
"My dream is to educate my son," she said.
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