Since demand outstripped the original target, a total of 16 ida countries, nine of which are in subsaharan africa, were identified for bank group support to help meet national financial access and inclusion commitments. Financial inclusion can help reduce poverty and inequality by helping people invest in the future, smooth their consumption, and manage financial risks. Financial development in sub saharan africa promoting inclusive and sustainable growth prepared by a team led by montfort mlachila and composed of larry cui, ahmat jidoud, monique newiak, bozena radzewiczbak, misa takebe, yanmin ye, and jiayi zhang author author author author. International remittances and financial inclusion in sub saharan africa english abstract. Gemechu ayana aga is a private sector development analyst in the enterprise analysis unit of the world bank. Digital financial inclusion in subsaharan africa central banks are mandated to promote and protect financial stability, but they need to balance this mandate with the need to foster financial inclusion, said afi head of strategy and member relations, mr. Download the little data book on financial inclusion. Digital learning for financial inclusion in subsaharan africa. The little data book on financial inclusion world bank. Digital financial inclusion in subsaharan africa alliance. Digital financial inclusion in subsaharan africa european. Aug 02, 2019 there is a capacity gap among banks and microfinance institutions mfis that limits financial inclusion. Without addressing these constraints, those 700 million accounts are a vanity statistic for the.
The global findex database is the worlds most comprehensive data set on how adults save, borrow, make payments, and manage risk. This paper summarizes financial inclusion across africa. The african finance journal, volume 1 9 part 1, 2017 1 financial inclusion and poverty reduction in subsaharan africa jabir ibrahim mohammed, lord mensah and agyapomaa gyekedako. Assessing financial inclusion advances in subsaharan africa. Taking stock of financial and digital inclusion in subsaharan africa. Adults around the world and in all income groups use an array of different financial services. First, it provides a brief overview of the african financial sector landscape. This paper examines barriers to financial inclusion across subsahara africa ssa using the 2014 global findex dataset from the demandside perspective. Kennedy komba during the roundtable, digital financial inclusion in subsaharan africa, in berlin earlier this year. While regulation by the government can act as a catalyst, financial institutions will need to work together with the public and private sectors. Evolving banking trends in subsaharan africa international. After a decade of strong growth, mediumterm economic prospects are still bright.
Financial inclusion equity council center for financial. Financial inclusion is through access to financial services such as credit, bank accounts, deposits, payments services, insurance, and pensions. Financial inclusion in sub saharan africa new data from the global financial inclusion global findex database show that 24 percent of adults in sub saharan africa have an account at a formal financial institution, and 16 percent use a mobile phone to pay bills or send or receive money. Saharan africa ssa is recovering from the most severe growth slowdown in two. The financial inclusion equity council fiec is the first membership organization to bring together the leading entities that make equity investments in financial inclusion throughout the developing world. Sep, 2016 with 350 million adults excluded from the formal financial ecosystem, sub saharan africa is working to provide better access to financial services. The trend is healthy, but there are challenges ahead. New data from the global financial inclusion global findex database show that 24 percent of adults in sub saharan africa have an account at a formal financial institution, and 16 percent use a mobile phone to pay bills or send or receive money. On october 6, the brookings africa growth initiative, the global development network, and the african economic research consortium hosted an event in which african researchers and aid agency staff engaged african policymakers in conversations on the present and future of policy in two key areas for the continentfinancial inclusion and agriculturebased on available policy knowledge and. Apr 27, 2017 however, a more innovative approach to financial inclusion is required in south africa. Delivering on financial inclusion, supporting financial stability.
Pdf financial inclusion, poverty and income inequality. Economies achieve their highest potential when all citizens can participate fully and without discrimination. The little data book on financial inclusion 2018 unsgsa. Apr 11, 2017 in india, pakistan, and the philippines, either the finance ministry or the central bank has taken the lead in pushing for financial inclusion. The little data book on financial inclusion 2018 iii contents. Subsaharan africa alliance for financial inclusion. For south africa, we recommend that the ministry of finance, the south african reserve bank, or both acting together start a multiyear journey of sustainable financial inclusion. July 2012 findex the global findex database notes financial. Understanding the challenges and harnessing the opportunities english abstract. Both the formal financial sector and micro financial institutions have recently witnessed fast growth in africa. Increased banking coverage must happen simultaneously with the necessary, domestic macroprudential policies that protect against the greater risks of transmitting financial shocks. Pdf this paper summarizes financial inclusion across africa.
Financial inclusion and poverty reduction in subsaharan. Developing financial markets in sub saharan africa paul a. Eleven of those 16 countries now have new or expanded world bank groupfinancial accessinclusion projects. As financial inclusion for individuals and microenterprises advances, new. Delivering on financial inclusion, supporting financial stability, banking in africa. Financial inclusion design in subsaharan africa when the world bank launched a focus on financial inclusion in 2011, about 2. International remittances and financial inclusion in sub. This data set represents a second round of data collection, following the initial round three years earlier. The sector has a reach that covers 44 million deposit. Financial inclusion is critical for the competitiveness of the middle east and north africa mena region, for employment creation, and for raising incomes and reducing poverty. This publication on financial inclusion in africa is produced by the staff of the african development bank, and the views expressed therein do not necessarily re. South africa is 1% away from its national development plan goal of 90% financial inclusion by 2030. The financial inclusion equity council fiec has, for over a decade, brought together the leading entities that make equity investments in.
Aug 31, 2015 taking stock of financial and digital inclusion in sub saharan africa. Financial inclusion global landscape 2018 mind maps. Financial institutions targeting the poor manage over 71 million accounts across subsaharan africa. Banking in subsaharan africa recent trends and digital financial. The effect of financial inclusion on welfare in subsaharan.
The evolution of financial inclusion after the world economic crisis in 2008 has been documented to contribute significantly to reduction in poverty and income inequality throughout the world. Taking stock of financial and digital inclusion in sub. According to the world bank, 24 % of the adult population of subsaharan countries had a bank account in 2011. This paper summarizes the status of financial inclusion in africa. International remittances and financial inclusion in subsaharan africa. In general, according to the recently published world bank findex survey, financial inclusion in subsaharan africa has increased dramatically from 23% in 2011 to 43% in 2017. Second, it uses the global financial inclusion indicators global findex database to characterize adults in africa. Women and digital financial services in sub saharan africa.
It concludes by outlining ways governments and businesses can help bring the regions 350 million unbanked adults into the financial. Regional financial integration in subsaharan africa. This paper uses world bank survey data, including about 10,000 households in five countries burkina faso, kenya, nigeria, senegal, and uganda to investigate the link between international remittances and households financial inclusion in sub saharan. In subsaharan africa and other developing markets, capacity building primarily consists of consultantled, inperson trainingsolutions that are expensive and not scalable. Women and digital financial services in subsaharan africa.
Financial inclusion design in subsaharan africa blog 11. Broadening financial inclusion in subsaharan africa. A report titled the mobile economy subsaharan africa 2017 published by gsma notes. The data represent a third round of data collection since the global findex database was launched in 2011. Despite instances of significant financial innovation, financial inclusion in lowerincome countries is uneven, especially in the regional case of sub saharan africa. This paper uses world bank survey data, including about 10,000 households in five countries burkina faso, kenya, nigeria, senegal, and uganda to investigate the link between international remittances and households financial inclusion in sub saharan africa. Financial inclusion is poor in subsaharan africa, but. However, much remains to be done and the pace of digital financial inclusion has varied in different african countries.
Designations employed in this publication do not imply the expression of any opinion, on. Second, it uses the global financial inclusion indicators global findex database to characterize adults in africa that use formal and informal financial services and identify the barriers to formal account ownership. The little data book on financial inclusion 2015 is a pocket edition of the global financial inclusion global findex database published in 2015. Pdf barriers of financial inclusion in subsaharan africa. Mobile drives financial inclusion in africa, growing 20%. Gemechu ayana aga and maria soledad martinez peria.