A bank, for example, books interest paid on a loan as current revenue. However, if the borrower subsequently defaults, that presumed interest payment would, in retrospect, be seen as a partial return of principal. We seek to cope with this uncertainty by constructing loan reserves, but the adequacy of those reserves is also subject to a forecast.
Recent examples in Africa include mobile banking (access to basic payment services through mobile phones), and new players in the financial systems such as deposit taking microfinance institutions, and agency banking (where banks are allowed to engage third parties to provide certain banking services on their behalf without having to put up brick and mortar).