The African Development Bank and their donor partners; Bill & Melinda Gates Foundation, the Government of Luxembourg and Agence Française de Développement; is set to launch the African Digital Financial Inclusion Facility (AFDI). They plan to launch it on the 12th of June 2019, during their Annual Meeting in Malabo, Equatorial Guinea.
The AFDI is designed to accelerate digital financial inclusions within Africa. To ensure that more Africans have access to the formal economy, they will support over 332 million Africans, of which 60% are women.
This initiative is coming at a time when digital services are important for financial inclusion, gender equality and inclusive economic growth. The services serve as a gateway for financial inclusion in low and middle-income countries.
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According to the McKinsey Global Institute estimation, the adoption of digital payments and financial services might increase the GDP of all emerging markets by 6%, a total of $3.7 trillion by 2025. This could create about 95 million new jobs across all sectors of the economy, increase general productivity and investment levels, and reduce leakages in government spending. Africa needs to leverage this opportunity to harness and build economies that are more inclusive.
As a forerunner to the launch of ADFI, the AfDB will support the Central Bank of West African States (BCEAO) with the sum of $11.3 million grant from the Bill and Melinda Gates Foundation. The BCEAO will leverage this fund to upgrade the digital payment systems of the eight West African countries belonging to the West African Economic and Monetary Union (WAEMU).
They will see to it that mobile network operators, microfinance institutions and fintechs become part of the payments ecosystem in the eight countries and will support micropayments over mobile phones on the shared system.
The sole purpose of this project is to increase financial inclusion, trade and cross border transactions in the WAEMU region. This project will be carried out along four key pillars to scale innovative digital financial inclusion and increase integration all over Africa. They include payment systems development and interoperability; digital products and innovation; policy regulatory reform and harmonization; and capacity building.
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