Looking to the Future of Financial Inclusion in Africa
Learning from the Partnership for Financial Inclusion
At a recent learning event for the Partnership for Financial Inclusion, we joined IFC to celebrate our $37.4 million joint initiative that has expanded microfinance and advanced digital financial services in Sub-Saharan Africa. The partnership is closing after seven years of working together toward a common objective: to enable millions of people in Africa to access safe, affordable, convenient, and lasting financial services.
At the learning event, Ann Miles, Director, Thought Leadership and Innovation, Mastercard Foundation, reflected on the recent and remarkable growth in financial inclusion in Africa. She also called upon the industry to move beyond those advances so that everyone, including women, youth, and rural populations, can benefit from more formal financial services.
Financial inclusion gains over the years of the Partnership are largely due to expanded digital financial services
- In 2011 the level of financial inclusion in Sub-Saharan Africa was just over 23 percent. In 2017, it was almost 43 percent, with a significant increase coming from digital financial services.
- According to Findex, while the share of adults in Sub-Saharan Africa with a financial institution account barely budged, the share with a mobile money account almost doubled to 21 percent. In every other region of the world, mobile money use is lower than 10 percent.
Contributions from our Partnership
- 4 million new digital financial services users on the continent. This is a 250 percent increase from the baseline.
- 39,500 new banking agents
- 2 million new savings accounts
- 7,000 new credit accounts
- $390 million in monthly transactions
The success of our partnership has rested on four critical factors
- Collaboration: Strong partnerships with 14 financial services providers combined with a committed and professional team at IFC.
- Sharing Knowledge: A robust research and learning agenda which has generated more than 20 influential publications, from field notes and handbooks to research reports.
- Flexibility and Adaptability: The ability to be responsive and adapt as market conditions change.
- Client Centricity: A commitment to results that improve the lives of clients, with sustainability at the centre of our work.
The Future of Financial Inclusion in Africa
“Financial inclusion at 43 percent for Sub-Saharan Africa is not acceptable. We should continue to work hard to reach those who need and want financial services, those who are unserved or under-served, including women, youth, and rural populations.” – Ann Miles
We recently committed to a bold, new strategy, Young Africa Works: to ensure that 30 million young people in Africa, primarily women, obtain dignified and fulfilling work by 2030. Our work in digital financial services will help us achieve that goal:
- Solutions are needed to create employment or entrepreneurship opportunities for youth which go beyond education and skills training. Young people need to be able to connect with market opportunities.
- Micro, small, and medium-sized businesses, the backbone of most African economies, need to grow, create jobs, and hire more people. To do that, these businesses often require more capital, greater management capacity, improved staff skills, and accessible markets.
- Technology is required to improve new data analytics and systems of these new companies to grow their businesses and access capital. Customers are reaping the benefits with broader and more affordable options.
- Governments are exploring how to improve their digital infrastructure, digitize payments, and put in place regulations to ensure digital financial services can be made available to, and used, by everyone.
“Let’s continue working on the challenges in financial inclusion around safety, affordability, convenience, and sustainability so that what has already been achieved, especially in this Partnership, can be leveraged for even greater success on the continent.”
– Ann Miles