At the peak of the Silicon Valley Bank collapse, I received frantic requests from African startups and investment firms scrambling to secure alternative bank accounts. Their go-to financial partner had crumbled, and offshore banking hubs like London, Jersey, Singapore, and Dubai seemed appealing but brought along the familiar baggage of discriminatory practices. For many African founders, banking outside the continent means endless paperwork and suspicion.
However, this week offers a potential shift, courtesy of Jamie Dimon, CEO of JPMorgan Chase, the largest U.S. lender. His announcement of JPMorgan Chase’s plans to open offices in Kenya and Ivory Coast has been viewed as a potential lifeline for African businesses, including startups. “We want to add a country or two to deepen our presence in Africa every couple of years or so,” Dimon remarked, as if expanding into the continent was as simple as adding a new houseplant. JPMorgan, with its $4.2 trillion in assets, sees Africa as fertile ground to plant its commercial and investment banking roots.
This move by JPMorgan, however, isn’t just about startups; it’s part of a broader global strategy. As U.S. banks like JPMorgan push into new territories, they are playing catch-up with Chinese banks, which have already carved out a strong presence in Africa. Dimon’s African expansion, therefore, appears driven as much by geopolitical influence as by potential profits.
Yet, unlike Chinese banks, which often engage directly with governments to fund large infrastructure projects, JPMorgan’s approach seems tentative. There’s a feeling that the U.S. giant is merely testing African waters, wary of diving in after past regulatory setbacks in Ghana and Kenya.
Nothing for Startups?
JPMorgan’s expansion plans in Africa aren’t exactly earth-shattering. The bank has had a relatively quiet presence in Nigeria and South Africa for years. Still, Dimon’s interest in Kenya and Ivory Coast has piqued curiosity: will African tech startups finally get a global bank closer to them? Or is this another case of foreign banks focusing on government and corporate clients while startups are treated as an afterthought?
Dimon acknowledges that startups aren’t JPMorgan’s initial focus. The new offices will provide traditional banking services to governments and multinationals, with no immediate plans for wealth management or asset services — the types of services startups need for fast growth. “We are not doing AWM now,” Dimon stated, hinting that it could happen eventually, which to startup founders likely translates as, “We’ll get back to you.”
Again, JPMorgan’s sheer size often makes it challenging for smaller clients, even with cutting-edge fintech solutions, to navigate the red tape. African startups have also faced varying treatment when banking with global institutions. In July, U.S.-based digital bank Mercury, popular with African startups, announced it would close accounts in 13 African countries, including Nigeria, due to regulatory challenges and a recent cybersecurity breach. This left many startups scrambling for alternatives.
The Bottom Line
JPMorgan Chase’s entry into Kenya and Ivory Coast with new offices is unlikely to trigger a sudden banking revolution for African startups. It feels more like a tentative handshake than a full embrace. The bank’s focus will remain on its core commercial and investment services for now, with only distant promises of startup-friendly offerings in the future.
As African entrepreneurs continue to navigate a landscape fraught with banking challenges, the need for accessible, responsive financial services remains paramount. While JPMorgan’s presence may provide some hope for improved banking relationships, it’s essential for African startups to advocate for more inclusive policies that meet their unique needs. Until then, they will likely face an uphill battle in securing the support they need to thrive in the international market.
