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The African Development Bank (AfDB) with its partners has launched the Africa Digital Financial Inclusion Facility (ADFI) which aims to expand digital financial transactions in Africa.
The AfDB launched the fund last Wednesday (12 June) at its Annual Meetings in Malabo, Equatorial Guinea.
In a statement on its website on the same day the AfDB said the fund is supported by the Bill & Melinda Gates Foundation, the French Development Agency (AFD) and the government of Luxembourg, who will act as the fund’s initial contributors.
The fund aims 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 $100m in grants and $300m in the form of debt by 2030 to scale up electronic financial services for low-income communities
The AfDB said 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.
AfDB president Akinwunmi Adesina (pictured above) said the bank believes 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.
The interventions will be aligned to four pillars, namely infrastructure — including digital and inter-operable payment systems — digital products and innovation, policy and regulatory reform and harmonisation, as well as capacity building.
The bank said the fund will also help to close the transaction gender gap between men and women.
Bill & Melinda Gates Foundation’s Michael Wiegand, who is the director of the foundation’s Financial Services for the Poor Programme, said financial inclusion achieved through digital financial service models can help relieve poverty on the continent while acting as a catalyst of sustainable economic development.
The fund’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 AfDB and the central bank of various West African states.
The grant will create an inter-operable 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.
AFD deputy head for Africa Sébastien Minot said with the initiative, the agency is convinced that its joint efforts can contribute efficiently to bring down the barriers that still undermine the full potential of digital finance in Africa.
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.
Featured image: AfDB president Akinwunmi Adesina (Flickr)