Out-Law News 2 min. read

Central banks back World Economic Forum African finance project


The central banks of Kenya, Rwanda and Tanzania are set to partner with the World Economic Forum (WEF) in an effort to expand access and usage of financial services.

The WEF said the partnership aimed to “bring together a coalition of local and international organisations to catalyse investment”, includes building “a micro, small, and medium enterprise (MSME) finance system” in the region.

According to the head of the WEF’s financial and monetary system initiative and executive committee member Matthew Blake: “The goal of the project is to bring together a coalition of local and international organisations... towards building an inclusive financial system that promotes sustainable economic growth in the region.”

The WEF did not give details of how the project would work. However, the WEF said the “three priorities” of the initiative included expanding MSME financing “by fostering responsible data capture and non-traditional credit analytics”, the WEF said.

In addition, the scheme would “reduce the gender gap, by supporting the creation of innovative financial products and services that fully meet the unique needs of women”. The move would also “engage youth in financial inclusion through encouraging entrepreneurship”. The WEF said this would include “offering greater opportunities to access the resources, including working capital needed to initiate and sustain a small business”.

The new initiative was discussed at the 27th World Economic Forum on Africa conference held this month in Durban, South Africa.

The WEF also used the conference to announce the launch of a new platform project, South Africa Internet for All, “which aims to bring millions of South Africans, including those in rural areas, onto the internet for the first time through new models of public-private collaboration”. The project, in partnership with the South African government, “will address the barriers that prevent universal internet access” including infrastructure connectivity and affordability, the WEF said.

Bright Simons, the president of Ghana-based technological development firm MPedigree, told the conference: “Technology is not always recognised as a critical tool of empowerment, but rather regarded as an activity on the margins of the economy. This attitude has undermined the significant contribution it can make to increasing economic efficiency and productivity. Governments need to mainstream technology in terms of policy and strategic thinking to raise its profile.”

Simons said despite the growth of technology in Africa through start-ups and entrepreneurs, “African governments still use their significant procurement budgets to buy technology solutions developed outside the continent, rather than taking advantage of the Africa-specific technology on their doorstep”.

A report published last year by the global mobile operators' association GSMA (73-page / 7.83 MB PDF) said “sub-Saharan Africa continues to account for the majority of live mobile money services (52%)”.

“Mobile money has significantly contributed to changing the financial inclusion landscape, particularly in sub-Saharan Africa, where 19 markets have more mobile money accounts than bank accounts,” GSMA said.

Earlier this year, the African Development Bank said mobile banking services in Africa would be stepped up under an agreement the bank signed with the Alliance for Financial Inclusion.

The bank said the memorandum of understanding signed by the two would “strengthen the technical capacity of financial regulators and policymakers across the continent to implement substantive policy reforms to advance financial inclusion”.

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