ADB launches digital financial inclusion fund
The African Development Bank (ADB) and its partners on 12 June launched the Africa Digital Financial Inclusion Facility (ADFI), designed to aid safety and expansion of digital financial transactions in Africa.
The fund, launched at the bank’s annual meetings in Malabo, Equatorial Guinea, is supported by the Bill & Melinda Gates Foundation (BMGF), the Agence Française de Développement (AFD) and the Government of Luxembourg, as initial contributors.
ADFI’s opening project, which serves as a pilot for the facility, is a $11.3 million grant from the BMGF 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 goal is to ensure that at least 320 million more Africans, of which nearly 60% are women, have access to digital financial services.
The fund will deploy $100 million in grants and $300 million in the form of debt from the Bank’s ordinary capital resources by 2030, to scale 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,” says ADB’s president, Akinwunmi Adesina.
Africa saw double-digit growth in mobile phone ownership in the first half of this decade, triggering a surge in innovative digital tools and services across the continent. Yet, the benefits are not shared equally. It is estimated that 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,” says Michael Wiegand, director of the financial services for the Poor Program at the Bill & Melinda Gates Foundation.
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.