Fund will help Africa go digital

14 Jun 19

A fund has been created to ensure that at least 320 million more Africans – nearly 60% of them women – have access to digital financial services.

The Africa Digital Financial Inclusion Facility is designed to improve the safety and expansion of digital financial transactions in the continent.

It will deploy $100m in grants and $300m in debt from the African Development Bank’s ordinary capital resources by 2030 in a bid to scale up electronic financial services for low-income communities.

“We believe that with the right investments in innovation and smart digital growth, the obstacles to achieving financial inclusion and greater economic opportunity for all will be overcome,” said Akinwunmi Adesina, president of the African Development Bank.

The fund was launched at the bank’s annual meetings in Malabo, Equatorial Guinea, this week and is supported with initial contributions from the Bill and Melinda Gates Foundation, the Agence Française de Développement (AFD), and Luxembourg’s government.

It will be used in four main areas – establishing infrastructure, including digital payment systems; digital products and innovation; policy and regulatory reform; and capacity building – and aims to close the “transaction gender gap” between men and women.

Africa saw double-digit growth in mobile phone ownership in the first half of this decade, triggering a surge in innovative digital tools and services.

However, the benefits of the digital revolution are not shared equally, and it is estimated that only 43% of adults across the continent have a bank account.

“Financial inclusion, achieved through digital financial service models, is simultaneously a powerful anti-poverty strategy and a catalyst of sustainable economic development for national and regional economies,” said Michael Wiegand, director of the Financial Services for the Poor Programme at the Bill and Melinda Gates Foundation.

The inaugural project of the ADFI is a $11.3m grant from the Bill and Melinda Gates Foundation to help west African states create a digital payment system allowing consumers to send and receive money between mobile wallets.

“With ADFI, we are convinced that our joint efforts can contribute efficiently to bring down the barriers that still undermine the full potential of digital finance in Africa,” said Sébastien Minot, AFD’s deputy head for Africa.

“It will enhance the delivery of quality and responsible digital financial services to the underserved, a cornerstone to inclusive and sustainable financial systems.

“AFD welcomes the specific attention that will be given to women’s digital financial inclusion in the evaluation of the projects to be supported.”

  • Gavin O'Toole, expert on Latin America
    Gavin O'Toole

    A freelance journalist. He has written six books about Latin America and taught the politics of the region at Queen Mary, University of London.

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