The African Development Bank (AfDB) and the Alliance for Financial Inclusion (AFI) signed a Memorandum of Understanding (MoU) to enhance access to quality financial services on the continent on Tuesday, January 31, 2017, in Abidjan, Côte d’Ivoire. The agreement aims to create a collaboration framework to promote financial inclusion in Africa.
This partnership is aligned with the Bank’s High 5 priorities and the Financial Sector Development Policy and Strategy. The Bank envisions a financial sector that is vibrant, innovative, robust and competitive both nationally and regionally. Modern financial systems will steadily expand their coverage, attaining almost universal access (at least 90 percent of the continent’s population) by 2025, providing essential financial services and products (deposit, payments, credit, and insurance), and improve quality and usage by offering a full range of financial products and services for the continent’s productive sector. 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 organizations like the Alliance for Financial Inclusion. On Tuesday, several AfDB departments involved in financial inclusion, namely Private Sector, Statistics, Human and Social Development, Renewable Energy, ICT, Gender Women and Civil Society, Agriculture finance and Rural Development joined a workshop led by the Financial Intermediation and Inclusion Division to explore ways to enhance collaboration with the Alliance for Financial Inclusion.
The Alliance for Financial Inclusion was represented by Norbert Mumba, Deputy Executive Director, and Efoe Koudadjey, Regional Coordinator Africa and the Middle East and North Africa (MENA) region.
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. AfDB and AFI agree on the need to scale up the effort in addressing the gender gap in access to financial services for women within the framework of the Denarau Action Plan, the AFI Network Commitment to gender and women’s financial inclusion.
AfDB and AFI observe that financial services offered through mobile technology have revolutionized 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 organization 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 and 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 will 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 Industrialization, 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 prioritize 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, “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.”