Knowledge

Author: Sadheshan Govender

Category:

Date: 25 June 2019

Financial Inclusion in Africa boosted by African Digital Financial Inclusion (ADFI) Fund

 

African Development Bank (AfDB) launched the African Digital Financial Inclusion Facility (ADFI) in June which is designed to boost digital financial transactions as well as aiding safety in Africa. This facility is supported by the Bill & Melinda Gates Foundation, the Agence Française de Développement (AFD) and the Government of Luxembourg with the goal of financially including at least 320 million Africans, the majority being women by providing access to digital financial services.

The fund aims to disburse a total of USD 400 M to up-scale digital financial services in rural and poverty-stricken areas by 2030. Focus will be placed on four pillars including the infrastructure of digital and inter-operable payment systems; innovation and digital products; harmonisation and the reformation of policies and regulation; and building capacity.

The facility’s pilot project is a grant to the Central Bank of West African States which is valued at USD 11.3 M. This project enables cash transfer among and between mobile wallets and other digital and bank accounts through an inter-operable digital payment system.

Sébastien Minot, AFD’s Deputy Head for Africa believes that ADFI will enable the full potential of digital finance in Africa by enhancing delivery of quality digital financial services to under-served communities. The ADFI facility will work with banks and non-bank financial institutions, mobile network operators, remittance and payment service providers, fintech companies, government ministries, regulatory bodies as well as regional economic organisations.

Georges Heine, Alternate Governor of AfDB believes that reducing poverty is dependent on economic empowerment and financial inclusion and that Africa will benefit from ADFI as it provides a platform enabling Luxembourg to combine focus on economic inclusion with its fintech orientation

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