Out-Law News | 13 Feb 2017 | 11:40 am | 2 min. read
The memorandum of understanding (MOU) signed by the two will “strengthen the technical capacity of financial regulators and policy-makers across the continent to implement substantive policy reforms to advance financial inclusion”, the AfDB said.
The AFI, whose members such as financial regulatory institutions and developing countries’ finance ministries work to increase access to financial services for the poor, said the MOU “aims to create a collaboration framework to promote financial inclusion” across the continent.
According to the AfDB and the AFI, “financial services offered through mobile technology have revolutionised and accelerated the economic landscape in agriculture, energy, microfinance, gender access, and small- and medium-enterprise (SME) financing in many African countries”.
Both organisations said they “will seek to develop this further through initiatives such as the African Mobile Phone Financial Services Policy Initiative and digital financial inclusion, where AFI members have been ahead of the curve for almost a decade now”.
AfDB vice-president for the private sector, infrastructure and industrialisation Pierre Guislain said: “The bank will leverage its resources to support AFI’s efforts on digital financial services, agricultural and SME sectors as well as gender. It will prioritise capacity building and knowledge sharing activities and nourish the dialogue for Africa’s policy-makers through global events and activities.”
AFI deputy executive director Norbert Mumba said: “Engaging with the AfDB to scale up and deepen financial inclusion in Africa has always been seen as a natural move for AFI in Africa, as it believes that AFI and the AfDB share the same objective of alleviating poverty and improving living conditions on the African continent. AFI considers the signing of this MOU as an important step toward improving in-country implementation of policies in African countries and making progress in achieving that crucial objective.”
According to the AfDB and the AFI, some 350 million people in sub-Saharan Africa are still “excluded from formal financial services”. “This includes approximately 125m farmers that receive cash payments for the sale of agricultural products owing to lack of access to quality and appropriate financial services.”
However, according to the Boston Consulting Group, sub-Saharan Africa is adopting mobile financial services “at a pace seen in few other places and presenting banks and mobile-network operators with a set of strategic choices that will go a long way toward determining their success in the region”. The group said the value of the region’s mobile money market could grow to $1.5bn up to 2019 as Africa’s ‘unbanked’ use their phones for a variety of financial transactions.
A report published last year by the global mobile operators' association GSMA (73-page / 7.83 MB PDF) said “sub-Saharan Africa continues to account for the majority of live mobile money services (52%)”.
GSMA said growth in mobile money services in 2015 across West Africa “was dramatic, with Burkina Faso, Mali, Ghana, and Cote d’Ivoire all contributing to the substantive regional turnaround”. “In 2015, year-on-year growth in active (mobile money) agents was 60.1%, which was twice the growth rate of any other region.”
Research by market analysts Ovum has forecast that the total number of m[obile subscriptions on the continent will rise to 1.33bn at the end of 2021.