AfDB signs $525,000 grant to strengthen fintech ecosystem across Africa
By Felicia Nwosu
In the bid to strengthen the fintech ecosystem across Africa, the African Development Bank (AfDB), has signed a 525,000 dollar agreement to support Africa Fintech Network’s (AFN)’s Hub project.
Lamin Barrow, the Director-General, AfDB, Nigeria Country Department, during the signing in Abuja, said the project would boost the fintech industry on the continent.
Barrow stated that the grant of 525,000 dollars will support the operationalisation of an on-line digital hub to serve as a repository of knowledge for fintech entities across the continent, and globally, while Digital Hub, which is to be delivered through a strategic partnership between the Africa Fintech Network and Cenfri, will help to strengthen the fintech ecosystem across Africa, and boost the industry’s competitiveness.
“The grant is funded by the Africa Digital Financial Inclusion Facility (ADFI), inaugurated by the AfDB Group, together with its partners the Bill and Melinda Gates Foundation. Other partners are the Ministry of Finance of Luxembourg, and Agence Française de Développement in 2019, with the Ministry of Finance and Economy of France and the Women Entrepreneurs Finance Initiative (We-Fi) joining in 2020 and 2022 respectively.”
The director-general described the establishment of the digital hub as a symbolic and important milestone in AfDB’s efforts to promote digital innovation and financial inclusion in African Countries.
The Senior financial analyst quoted the 2021 Global Findex Study, as saying that 49 per cent of Africans were excluded from the formal economy and the benefits it brought.
He reiterated the importance of fintech on the continent among which is to provide powerful, readily available and effective digital financial solutions to help bridge the financial inclusion gap.
Barrow said with the current digital disruption in the financial sector, more fintech startups were coming to the fore.
“These companies are leveraging technology to provide innovative financial services, including payment, lending, savings, financial literacy and financial infrastructure services. That result in greater efficiency, better service provision and lower costs, he said.
According to him, financial inclusion is key to economic empowerment and resilience, particularly for underserved segments of our society.
He said the need to leapfrog barriers and scale up inclusive digital financial solutions to accelerate economic resilience across Africa had become even more urgent.
He quoted AfDB’s President, Dr Akinwumi Adesina, as saying, with the right investments in innovation and smart digital growth, the obstacles to achieving financial inclusion and greater economic opportunity for all would be overcome.
According to Barrow, the Hub will enable fintech associations across Africa to pool knowledge, strengthen partnerships and showcase their innovations and impact, including from female-led or owned fintech enterprises.
“The project design is underpinned by detailed needs assessment that informed the value proposition of the AFN Hub as a one-stop knowledge repository. It will help enhance coordination among African fintech associations, improve linkages for market access and investment opportunities, for effective advocacy with key public and private stakeholders. The AfDB is strongly committed to our partnership with the AFN to fully unlock Africa’s fintech potential and create a digital economy.”
In response, DrSegun Aina, AFN President, thanked AfDB for the support, while pledging their commitment to deliver the project.
“We are indeed delighted that AfDB is playing a leading role in supporting this innovative initiative. The AFN is equally committed to the partnership with the AfDB. And we look forward to building on this productive collaboration going forward, as there is still a lot to be done to unleash the potential of digital inclusion for Africa toward creating the Africa that we want,” Aina said.
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