Access to financial services key to development, growth

03Aug 2021
The Guardian
Access to financial services key to development, growth

IN sub-Saharan Africa, 350 million people are excluded from formal financial services. This includes approximately 125 million farmers that receive cash payments for the sale of agricultural products owing to lack of access to quality and appropriate financial services.

As a result the African Development Bank (AfDB) and the Alliance for Financial Inclusion (AFI) have signed a Memorandum of Understanding (MoU) to enhance access to quality financial services on the continent. The agreement aims to create a collaboration framework to promote financial inclusion in Africa.

Indeed we agree on the need to scale up the effort in addressing the gender gap in access to financial services for women.

We are told the partnership will also strengthen the technical capacity of financial regulators and policy-makers across the continent to implement substantive policy reforms to advance financial inclusion.

In order to implement its Financial Sector Development Strategy, the bank relies notably on strategic and innovative collaborative partnerships with organisations like the Alliance for Financial Inclusion.

According to the two organisations, financial services offered through mobile technology have revolutionised and accelerated the economic landscape in agriculture, energy, microfinance, gender access, and SME financing in many African countries. 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.

The Alliance for Financial Inclusion is the world’s leading organisation on financial inclusion policy and regulation. The member owned-network promotes and develops evidence-based policy solutions that improve the lives of the poor.

AFI is led by its members, comprising mainly financial regulatory institutions such as central banks, superintendencies and ministries of finance from developing countries. The network currently includes members from 94 countries working together to accelerate the adoption of proven and innovative financial inclusion policy solutions with the ultimate aim of making financial services more accessible to the world’s unbanked.

AfDB’s intellectual partnership with AFI is expected to facilitate substantial returns for Africa by supporting a truly innovative model of collaboration and knowledge exchange among policy-makers, the private sector and other stakeholders that will shape financial inclusion policy-making on the African continent in years to come.

At the signing of the MoU, Pierre Guislain, AfDB Vice-President for Private Sector, Infrastructure and Industrialisation, 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.”

Norbert Mumba, AFI Deputy Executive Director, said that 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,” he noted.