AfDB and partners launch new fund to boost digital financial inclusion

GUINEA – The African Development Bank in collaboration with partner organisations has launched the Africa Digital Financial Inclusion Facility (ADFI) to accelerate digital financial transactions across the continent.

The fund is supported by the Bill & Melinda Gates Foundation, the Agence Française de Développement (AFD) and the Government of Luxembourg, as initial contributors.

With a goal to ensure access to digital financial services, the initiative will deploy US$100 million in grants and US$300 million in the form of debt from the Bank’s ordinary capital resources by 2030.

It targets to reach at least 320 million more Africans, of which nearly 60% are women on the digital platform by scaling 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 African Development Bank President Akinwunmi Adesina.

The interventions will be aligned to four pillars; infrastructure, including digital and interoperable payment systems; digital products and innovation; policy and regulatory reform and harmonisation; and capacity building. It will help to close the transaction gender gap between men and women.

According to research, despite Africa having seen double-digit growth in mobile phone ownership in the first half of this decade, only 43% of adults across Africa have a banking 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 Program at the Bill & Melinda Gates Foundation.

ADFI’s opening project, which serves as a pilot for the facility, is a $11.3 million grant from the Bill & Melinda Gates Foundation to the Bank and the Central Bank of West African States.

The grant will create an interoperable digital payment system that will allow consumers to send and receive money between mobile wallets, and from these wallets to other digital and bank accounts.

The ADFI 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.

To achieve these ambitious goals, a three-member panel has been formed comprising of Bank Vice President Pierre Guislain, Private Sector, Infrastructure and Industrialization, Vanessa Moungar, Bank Director of Gender, Women and Civil Society, and Konstantin Peric, deputy Director, Financial Services for the Poor at the Bill & Melinda Gates Foundation.

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