More regulation can improve financial inclusion in Africa, says new report
Kenya, South Africa, Uganda, Rwanda and Nigeria ranked among the top ten in terms of financial inclusion.Implementing additional regulation would significantly speed-up the development of financial ecosystems and the spread of digital mobile services, according to a new report.
The Brookings Institution looked at 26 countries across Africa, Asia and Latin America to assess their commitments towards devising national financial strategies and their effects on the penetration of mobile services, and the various use of both traditional and digital financial services.
The report, published on the website of the US think-tank, found that Kenya, South Africa, Uganda, Rwanda and Nigeria ranked among the top ten in terms of financial inclusion.
Brookings highlighted the example of Kenya, where the government implemented new consumer protection laws and regulations in the financial sector, that eventually accelerated the development of financial inclusion.
It commended Kenya's decision to amend the Finance Act to open branchless banking activities and allow third-party entities to act as agents for the banks.
Mobile banking transactions also soared after the central bank created a specific framework for this industry, leading millions of people into the formal financial system.
The report concludes that a strong regulatory framework is essential to get more customers to trust the financial system.