New moves to spur financial inclusion in Central, East Africa

Two events – a workshop in Central Africa and a partnership deal in East Africa – recently happened with the goal of extending financial inclusion services to underserved people in these two regions of Africa, and even beyond. Relatedly, a recent World Bank blog write-up has underlined how digital payments is catalyzing financial inclusion efforts in Ethiopia.

Douala workshop discusses financial inclusion innovation

A workshop organized by instant payment organizations AfricaNenda and the Groupement Interbancaire Monétique de l’Afrique Centrale (GIMAC), took place in Cameroon’s commercial capital Douala last month with the objective of discussing innovative approaches to expanding financial inclusion within the Central Africa region.

According to Africa.com, the workshop was a first major step in a collaboration between the two entities sealed in September 2023. It also provided attendees a platform to deepen their notion of inclusive payment systems, learn best practices and explore use-cases for merchant payments.

Valentin Mbozo’o, general manager of GIMAC, said the workshop was to “develop, improve the modelling of the instant and inclusive payment system, and better specify key performance indicators, while improving the monitoring of the GIMACPAY ecosystem.”

Jamelino Akogbeto, West Africa regional director at AfricaNenda, remarked that the start of their journey with GIMAC through the workshop gives them hope that they’ll be able to “achieve our goals of driving tangible progress in digital payments and financial accessibility across Central Africa in the coming months.”

M-PESA Safaricom, Onafriq seal deal for financial inclusion in Ethiopia

Onafriq, known formerly as MSF Africa, recently signed a partnership agreement with M-PESA Safaricom to facilitate remittance payments to Ethiopia.

The deal means that users in Ethiopia will be able to receive payments from Europe, Australia, North America and other parts of Africa through M-PESA, a widely used mobile money service in East Africa. Onafriq operates in 40 African countries.

“Our goal is to make payment easier and the incorporation of international money transfer services into M-PESA serves that purpose perfectly. Ethiopia generates more than five billion USD in remittance annually and this partnership would provide the Ethiopian Diaspora with an easy and fast formal channel to send money to their loved ones in Ethiopia,” says Paul Kavavu, general manager of Safaricom M-PESA.

Onafriq Group Head of Growth, Nika Naghavi, comments that the partnership will support Ethiopia’s digital transformation efforts in the domain of financial inclusion. “We have always believed that payments should be a simple process that connect individuals through increased access. The agreement with M-PESA Safaricom extends our reach in Africa even further and strengthens our position as the best payments network in the continent.”

Meanwhile, Ethiopia has been using digital payment platforms to facilitate the distribution of cash assistance to millions of beneficiaries under a government safety net program.

As explained in a World Bank blog article written by a trio of specialists, the digital platforms have made it easier for over nine million poor people to either receive cash or food rations.

The article mentions that prior to the introduction of the digital payment system, many of the beneficiaries were financially excluded as they had nothing to do with mainstream financial institutions because of lack of identification documents.

Apart from trying to meet its financial inclusion target as outlined in the Ethiopia Digital 2025 Strategy, the idea is also to ensure that many more unbanked households are positively impacted.

The authors note that while digital payment systems have improved the way social protection cash is distributed in Ethiopia and elsewhere around the world, more work is needed to “realize the full potential of e-payments to generate program efficiency, cost-effectiveness, and insightful data that informs policy and operations.”

An upcoming World Bank paper will discuss ways of closing the gender gap in financial inclusion efforts.

Article Topics

Africa  |  biometrics  |  digital ID  |  digital payments  |  Ethiopia  |  financial inclusion  |  M-Pesa  |  mobile banking  |  social protection