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

Toolbox Date
Toolbox Description

MFW4A and USAID organized a webinar on "Digital Financial Services in Agriculture".

Toolbox Date
Toolbox Description

November 2017: MFW4A and FMO organised a webinar on "Interoperability and Collaboration between Fintechs, Financial Institutions and Mobile Money Providers".

Networking and Advocacy Networks

High-Level Conferences and Roundtables

Toolbox Date
Toolbox Description

MFW4A co-organized the Ninth Annual "Responsible Finance Forum" with IFC, BMZ, GIZ, CGAP, the Better than Cash Alliance at UNCDF, and the World Bank in Dar es Salaam, Tanzania.

Project Support and Capacity Building

Trainings and Marketplaces


Jun 14, 2019
Kenya is the undisputed leader of mobile banking in Africa, according to a research published early June 2019 by Egyptian investment ban
Jun 13, 2019
South Africa’s first fully digital bank TymeBank announces the launch of its unsecured loan services in July 2019.
Jun 11, 2019
MTN Ghana has set itself an ambitious target to attract 20 million customers on its Mobile Money service by
May 30, 2019
Local consumers and businesses will now be able to withdraw or deposit cash and make a purchase at an enabled FNB point of sale mer
Apr 04, 2019
Global; Online
Big Data Analytics in Digital Finance: Opportunities, Risks and Approaches for Data Protection 4 April, 2019 | 1:00pm GMT Please join Making Finance Work for…
Feb 27, 2019 - Feb 28, 2019
Tunis, Tunisia
As part of their series of regional financial sector policy dialogue and stakeholders’ consultation workshop in Africa, Making Finance Work for Africa (MFW4A)…
Jan 17, 2019
Global, Online
Based on the key findings of a survey conducted by the EIB Economics Department, in collaboration with senior economists and researchers from the private…
Oct 29, 2018 - Oct 30, 2018
Abidjan, Côte d'ivoire
The workshop provided an opportunity to present the findings and recommendations of two studies conducted this year and commissioned by the Migration and…
Jun 24, 2019 - Jun 28, 2019
Washington, D.C., USA
The 2019 Overview Course of Financial Sector Issues aims at providing a solid knowledge of the fundamentals of the financial sector and an opportunity to learn…
Jun 25, 2019 - Jun 27, 2019
Nairobi, Kenya
This three-day international forum aims to confront the most pressing financial inclusion question of the day: How we promote inclusion and trust in digital…
Oct 21, 2019 - Oct 25, 2019
Ouagadougou, Burkina Faso
Open to all microfinance practitioners and other related sectors, the SAM aims to become a common African platform that offers a true framework for discussion…


The trend towards digital financial products combined with digital customer interactions increases the financial sector’s exposure to cyber…
The past decade has seen the emergence of digital platforms. These digital platforms (also known as multi-sided platforms[1]) connect buyers…


Jun 11, 2019 | A. Sy, A. Massara, H. Perez-Saiz and al. | International Monetary Fund
Jun 11, 2019 | FSB | Financial Stability Board (FSB)
May 20, 2019 | Majid Bazarbash | International Monetary Fund
May 11, 2019 | G. Murthy, M. Fernandez-Vidal, X. Faz et al. | CGAP
May 11, 2019 | G. Murthy, M. Fernandez-Vidal | CGAP
Apr 30, 2019 | M. Biallas, M. Aijazuddin, L. Camba Opem | IFC

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.