Financial Inclusion Back

Digital Finance


Some of the more radical changes in financial services today are happening in Africa, where new products and delivery methods are reaching the financially excluded and the underserved. No region in the world has seen digital financial services (DFS) contribute more to financial inclusion in the last few years than Africa. The 2017 Global Findex results attest to this fact, with Africa leading in the Mobile Money accounts, currently at 20.9% of adult population compared to 4.2% in South Asia, 5.3% in Latin America & Caribbean and 4.4% globally. The data also shows that 34.4% of adult population in Sub-Saharan Africa made or received digital payment in 2017, up from 26.9% in 2014. This proliferation has extended beyond account ownership and basic transactional use, and now includes a broad array of financial services such as credit, savings, insurance and cross-border remittances.

New market entrants such as Mobile Network Operators (MNOs), FinTechs and other third-party agents are capitalizing on the proliferation of digital and mobile channels, which is reducing costs and making financial services more convenient and accessible to customers, while moving away from unsecured cash-based transactions. DFS as opposed to traditional banking services also provides customers the ability to transact in small amounts.


Despite these positive global trends, the landscape of digital financial services is quite diverse in Africa. While some countries are endowed with numerous DFS offered by a range of financial service providers (FSPs), other markets are characterized as very narrow with basic financial services provided by a limited number of FSPs or by informal financial services. In addition, the growth in mobile phone ownership does not always equate to an increase in day-to-day use of DFS by the population; In Nigeria for example, the high mobile penetration levels have not resulted in widespread adoption of mobile money and other DFS. In most SSA countries, the rise in mobile phone subscriptions has not necessarily translated into mobile money transactions. In fact, the highest shares of mobile transactions per GDP are observed in countries like Kenya, Tanzania and Uganda, which do not stand out particularly in terms of mobile phone penetration. Conversely, in countries like Botswana and Namibia where less than two thirds of adults have a bank account, there are already more mobile phone subscriptions than inhabitants and yet the volume of mobile money transactions is strikingly low. Mobile infrastructure is not the main bottleneck everywhere and digital financial inclusion has a high unrealised potential in many countries. In Mauritius, the extensive reach of both urban and rural banks explains the under-development of mobile-based accounts. In Tanzania and Cote d’Ivoire, mobile-based accounts have flourished due to the scarcity of rural banks.

The widespread deployment of mobile payment systems, has raised a number of oversight challenges, including legal uncertainties, customer protection, money laundering and financing of terrorism risks, as well as operational and liquidity risks among others. There are also fundamental issues around data protection to consider. The emergence of Fintech and other non-bank payment service providers implies that a broad range of financial and non-financial data is being held and shared across a number of parties. While enhanced data and analytical capability holds great promise for customers, providers and supervisors of financial services, this can only be properly harnessed if privacy and data protection risks are addressed.

The penetration and success of additional financial products, such as bill/merchant payments and bulk disbursements, has been mixed. Merchant payments have struggled to gain traction, and account for only 5% of the volume of transactions and 5% of the value of transactions in 2016. The value proposition for merchants to accept digital payments is still developing and needs to fit local market criteria such as banking infrastructure (card or wallet based), customer preferences and behavior around digital wallets (large or small balances), and norms around payments to suppliers (cash or other methods).


Building consumer trust is key for achieving sustainable uptake and active usage of digital financial services in Africa. The development of effective supervision and oversight frameworks can help maintain public trust and payment system stability, particularly in Africa where digital payments are a major tool for financial inclusion. Adopting a proportionate risk-based approach to both regulation and supervision can strike the right balance between “enabling” innovations to help broaden financial inclusion, while maintaining flexibility to preserve financial stability and system integrity.

Regulators in East Africa in particular have led the way in introducing regulation only after a need for it has been shown. This regulatory flexibility coupled with an environment marked by constant digital innovations have promoted the diversification of operators and distribution channels, as well as access to financial services for people who are usually excluded from the formal financial system.

The proliferation of technology-driven trends in the distribution of DFS, such as biometrics to enhance security and the use of digital footprints is a source of credit referencing for microfinance institutions. The use of alternative data to evaluate credit risk in particular, has received a lot of attention due to their success in some markets on the continent. Big data analytics presents an unprecedented opportunity to better understand and serve clients, especially those otherwise excluded from the financial system. Trends such as distributed ledger technology and blockchain have the potential to challenge and impact conventional ways of delivering financial services. However, very limited actual ‘use cases’ have been introduced to demonstrate how these technologies can help expedite financial inclusion. 

Highlights of our Activities

MFW4A supports the development of an enabling environment to allow digital finance to flourish and overcome barriers to financial inclusion. We also explore the potential for digital payment solutions to support the expansion of access to critical services, such as water, energy, education, health, etc. 

Knowledge Management and Research

Webinars, Knowledge Briefs, Case Studies

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Webinar jointly organized with GIZ on behalf of BMZ exploring big data analytics in digital finance, and the opportunities, risks and approaches for data protection

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Published report on “The Opportunities and Risks of Digitization in Remittances in WAEMU and CEMAC regions”, in collaboration with AfDB, the French Government and IFAD

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Webinar jointly organized with FMO and Above & Beyond to explore how FinForward, an innovation integration platform aims to connect African FIs and Mobile Money Providers with Fintechs from around the world

Networking and Advocacy Networks

High-Level Conferences and Roundtables

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Regional Responsible Finance Forum jointly organized with IFC, BMZ/GIZ and the Ministry of Netherlands in Dar es Salaam, Tanzania under the theme “Investing in Responsible Finance and Innovation for Africa’s Digital Economy”.

Project Support and Capacity Building

Trainings and Marketplaces

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Training in collaboration with GIZ, CGAP and the Toronto Centre on Digital Finance Supervision in the WAEMU region in Abidjan, Côte d’Ivoire


May 06, 2021
The Central Bank of Angola (BNA) plans to create money transfer services by cell phone this year to reduce crowds in commercial ban
Apr 27, 2021
The Central Bank of Nigeria (CBN) has granted operating licences to 10 additional international money transfer operators (IMTOs) as
Mar 11, 2021
Internet and mobile banking grew with disruptions occasioned by the Covid-19 pandemic, a Bank of Uganda review has shown.
Feb 23, 2021
The value of mobile payment volumes increased by 206 per cent in 2020 to Rwf 7.177 billion from Rwf2.349 billion in the previous ye
Feb 11, 2021
Virutal (Online)
The EIB West and Central Africa SME Banking and Microfinance Academy 2020-2021 Webinar series Making Finance Work For Africa (MFW4A) and the IPC, Horus and…
Sep 30, 2020
Global (Online)
30 September 2020 - The Making Finance Work for Africa (MFW4A) Secretariat, FSD Africa and Agritask hosted a webinar entitled "Onboarding, Monitoring &…
Sep 22, 2020
Dear Readers, I hope this message finds you well. It is an honour for me to assume the role of the Making Finance Work for Africa (MFW4A) Partnership…
Sep 21, 2020
The COVID-19 pandemic has greatly disrupted economic activity around the world and significantly affected global financial conditions. Experts predict that the…
Jun 16, 2021 - Jun 18, 2021
Nairobi, Kenya
From 16 to 18 June 2021, the United Nations Office at Nairobi (Kenya) will host the Global Forum on Remittances, Investment and Development (GFRID) – Africa…


Dear Readers, More than a year since Africa recorded its first confirmed case of the Covid-19 virus in Egypt on 14th February 2020, and there…
Rejection rates for trade finance applications for SMEs in Africa are rising, with bank participation in activities decreasing. Conducted over…

Strategic Partners

We are a multi-donor initiative with a strong partnership and collaborative mindset. We work with a variety of local, regional, and international institutions, both public and private, in order to achieve our mission to develop the African financial systems. Below is a summary of the institutions we work with to support the development of Digital Finance in Africa.