The African Development Bank (AfDB) is continuing in its drive to provide funds for the development of the continent. The multilateral development bank has announced the launch of the Africa Digital Financial Inclusion Facility (ADFI) to improve and expand digital financial transactions across Africa.
The new fund was launched at the bank’s annual meetings and has the Bill & Melinda Gates Foundation, the Agence Française de Développement (AFD) and the Government of Luxembourg, as initial contributors.
Between 2010 and 2015, Africa saw significant growth in mobile phone ownership, which triggered the rise of innovative digital services across the continent. Yet, the benefits are not shared equally, as about 57% of adults across Africa are unbanked.
Now the ADFI will be supporting Africa-based digital financial services across the continent over the next decade to ensure that financial services are brought to more Africans especially those in low-income communities – with a target of 320 million of which nearly 60% are women. Thus, helping to close the transaction gender gap between men and women.
It will be providing $100 million in grants and $300 million in the form of debt from AfDB’s ordinary capital resources by 2030 to this effect.
The fund will be focused on four areas; infrastructure – including digital and inter-operable payment systems; digital products and innovation; policy and regulatory reform and harmonisation; and capacity building.
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.Akinwunmi Adesina, President, African Development Bank (AFDB).
The inaugural project of the ADFI is a $11.3m grant from the Bill and Melinda Gates Foundation. This grant will help West African states create a digital payment system allowing consumers to send and receive money between mobile wallets, and from these wallets to other digital and bank accounts.
The ADFI will work with financial institutions (bank and non-bank), mobile network operators (MNOs), remittance and payment gateway providers, fintech startups, government MDAs and regional economic organisations.
This is the latest move by the bank in its quest for technology innovation on the African continent. Last year, the bank launched the “Entrepreneurship and Innovation Lab programmes (eLab)” to cater to innovators in the agricultural and tech sectors.