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Digital platforms increase financial inclusion

Zachary Ochuodho @zachuodho

Increasing growth of digital financial services in Africa has led to an unprecedented increase in the number of people enjoying access to formal financial services, a study indicates.

The study conducted in 14 countries in Africa, including Kenya names the digital financial services like agent banking, mobile money, mobile wallets and bank-to-wallet – as services that have resulted in financial inclusion.

According to the study by the International Finance Corporation (IFC), mobile money solutions and agent banking, today offer affordable, instant and reliable transactions, savings, credit and insurance opportunities to Kenyans where banks have not established a branch.

“Africa is home to more digital financial services deployments than any other region in the world, with almost half of the nearly 700 million individual users worldwide,” said IFC chief executive Philippe Le Houérou.

Le Houérou said the move has put banking at everyone’s fingertips. What makes a difference for a small-scale entrepreneur or a smallholder farmer, the study says, translates into broader gains for society.

“Ten years after the breakthrough of digital financial services in sub-Saharan Africa, field studies show that access to mobile money services has increased daily per capita consumption levels of households, lifting them out of extreme poverty,” he says.

The study indicates that mobile money services have changed lives – for example, helping women move from subsistence farming to business occupations and sustainable livelihoods.

In total, IFC partnership with 14 African financial services providers from 2012 to 2016 has resulted in 7.2 million new digital financial services users on the continent, 45,000 new banking agents and Sh30.1 billion in monthly transactions.

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