1. May 2016

2. Financial access low, but expanding rapidly. Strong stimulus to financial services …  Economic growth … Uganda & Rwanda economies nearly double between 2013 and 2017; Tanzania 1.5 x bigger; Kenya 75% bigger  Growing middle class & sharp increase in urbanisation  Resulting growth in demand for services  Development & reforms of the financial sector; in underlying credit market infrastructure and tightening of banking regulations  Reduction in trade barriers / entry restrictions … increase in regional & international trade  High adoption rate on new technology, including mobile, and ongoing innovation … 2 KPMG

3. 3

4. Significant populations, but at this stage still a small urban / middle class … … SA urban population still bigger than any other in East Africa … SA credit market 9x bigger than all other in East Africa together; 16x bigger than Kenya (GDP 3 x Kenya) … Big differences in size of credit market in different countries, not correlated to size of population … Large number of banks in most countries, given market size; many unprofitable; consolidation inevitable 4  population grow  economic growth  low penetration  size of middle class  ticket size  income instability

5. Kenya Banks 5 … 4 bank failures in last 6 months … East African banks Kenya, Ethiopia, Rwanda, Tanzania, Zambia

6. 6 KenyaUganda Ethiopia Tanzania

7. Regulatory picture neither uniform nor simple … o Concerns with consumer protection; new standards o Interest regulation; payroll deduction standards o Domestic ownership in some (Kenya, Ethiopia), greater flexibility in others … & focus on regional trade Complex picture … o … differences between credit … agri-finance, personal finance, mobile services … o … between insurance, fintech, fund management o … huge differences between different countries Huge possibilities; but not a game for the faint-hearted, for making an easy buck! 7

8. 8

9.  NCA was an international benchmark in 2007. Yet, African Bank put under curatorship in 2014; impaired records had increased to 48% by 2013 …  Not to ignore significant gains, in expansion of credit access; changes in types of credit available to consumers; access to debt counselling; legal rights & redress  However – 9.9 mil consumers with impaired records; by 2010 consumption credit overtook mortgages granted; misleading disclosure; deceptive marketing and reckless credit granting still rife.  And lenders willing to accept extraordinarily high default rates … based on high interest rates charged  Currently, government responding with increasingly prescriptive & interventionist regulation – data removal; prescribed affordability criteria; considering debt forgiveness … can you blame them!? 9

10.  So, what is wrong in our market? We are clearly not achieving our objectives of 2007 … what went wrong … what now!?  What is the problem: too many hungry wolves amongst the sheep? The guns not strong enough? The hunters not willing to shoot? Or something entirely different? Or is it all OK?  Something wrong with the consumers?  What can we learn from Myburg Report?  Options not that many  Prescriptions on affordability, data cleansing, debt forgiveness etc?  Expanded debt counselling powers & stricter limitation on EAOs?  Broader penalties against non-compliance, better integration into related legislation?  Tighter limits on interest and fees … to reduce incentive for reckless credit granting and accommodation for high default rates?  Or are we happy to carry on as is … !? 10

11. 11