African Development Bank and Partners Launch New Fund to Strengthen Digital Financial Inclusion Policies

Its goal is to provide access to digital financial services to some 332 million more Africans

MALABO, Equatorial Guinea, June 13, 2019/ -- The African Development Bank (www.AfDB.org) and its partners on Wednesday officially launched the African Digital Financial Inclusion Facility (ADFI) designed to contribute to the security and development of digital financial transactions in Africa.

The Fund, which was officially launched at the Bank's Annual Meetings in Malabo, Equatorial Guinea, is sponsored by the Bill and Melinda Gates Foundation, the French Development Agency (AFD) and the Government of Luxembourg, which are the largest donors.

Its goal is to provide access to digital financial services to some 332 million more Africans, 60 % of whom are women. The fund will leverage US$100 million in grants and another US$300 million in debt from the Bank's regular capital resources by 2030 to develop e-financial services for low-income communities.

"We believe that with the right investments in innovation and smartly driven digital growth, barriers to financial inclusion will be overcome and better economic opportunities will present themselves for all," said Akinwunmi Adesina, President of the African Development Bank.

Interventions will be based on four central elements: infrastructure, including digitized and interoperable payment devices; digital products and innovations; policy and regulatory reform and harmonization; and capacity-building. They will contribute to reducing the gender gap in financial transactions.

Africa experienced strong growth in the number of mobile phone users in the first half of the decade, leading to a sharp increase in the amount of innovative digital tools and services available on the continent. And yet, the benefits are not equally shared. It is estimated that in Africa, only 43 % of adults have a bank account.

"Financial inclusion achieved through digital financial services models is both a powerful anti-poverty strategy and a means to boost the sustainable development of national and regional economies," said Michael Wiegand, Director of the Financial Services for the Poor Program at the Bill and Melinda Gates Foundation.

ADFI's inaugural project, which serves as a pilot project for the Facility, consists of an US$11.3 million grant from the Bill and Melinda Gates Foundation to the Bank and Central Bank of West African States. It will enable the creation of an interoperable digital payment system through which users will be able to send and receive money from mobile wallets, and from these wallets to other digital and bank accounts.

"With ADFI, we are convinced that our joint efforts can effectively contribute to the removal of barriers that continue to delay the development of digital financial services in Africa. One of the cornerstones of inclusive and sustainable financial systems, it will enable the development of the delivery of quality digital financial services to underserved populations. AFD welcomes the particular attention paid to the digital financial inclusion of women when evaluating the projects we need to support," said Sébastien Minot, AFD's Deputy Head for Africa.

ADFI will collaborate with banks and non-bank financial institutions, mobile network operators, payment and credit transfer service providers, fintech companies, ministries, regulators and regional economic organizations.

"Luxembourg believes that poverty reduction and social cohesion go hand in hand with economic empowerment and financial inclusion. ADFI provides Luxembourg with an excellent platform to combine its focus on economic inclusion and fintech orientation for the benefit of poor populations in Africa," said Georges Heine, Alternate Governor of the African Development Bank representing the Ministry of Finance of Luxembourg.

A three-member panel including Pierre Guislain, the Bank's Vice President for Private Sector, Infrastructure and Industrialization, discussed the modalities, the necessary policies to be put in place and the difficulties likely to be encountered to enable the fund to achieve its objectives.

The other two participants were Vanessa Moungar, Director of the Bank's Gender, Women and Civil Society Department, and Konstantin Peric, Deputy Director of Financial Services for the Poor at the Bill and Melinda Gates Foundation.