The African Development Bank (AfDB) and the Africa Fintech Network (AFN) have agreed to a $525,000 grant partnership to establish the Africa Fintech Hub, an online portal that will serve as a one-stop-shop for all fintech activities in Africa. The hub is a digital platform that will allow African fintech associations to pool resources and knowledge, strengthen relationships and partnerships, and showcase the work of African fintech, including those led or owned by women.
Meanwhile, the Africa Digital Financial Inclusion Facility (ADFI) will fund and support the Africa Fintech Network in hosting and managing the Hub. The Africa Fintech Hub will be delivered through a strategic collaboration between AFN and the Centre for Financial Regulation and Inclusion (Cenfri), which will provide technical assistance in the Hub’s development as well as promote research, knowledge creation, and other innovative initiatives.
Lamin Barrow, Director General of the African Development Bank’s Nigeria Country Department, emphasized the importance of the bank’s support for the project, saying it would help to strengthen Africa’s fintech ecosystem, boost competitiveness in the digital world, and leverage partnerships.
“At the African Development Bank, we recognize that we have a major role to play in helping to create a robust, efficient, and sustainable fintech ecosystem across the continent. We are accelerating the delivery of our High 5 strategic priorities through various innovative interventions. These have helped improve access to digital infrastructure, including Information and Communications Technology linkages to landlocked countries and broadband internet services. The need to leapfrog barriers and scale up inclusive digital financial solutions to accelerate economic resilience across Africa has become even more urgent.”
African Fintech Hub to Drive Financial Inclusion
The African Development Bank and its partners established the Africa Digital Financial Inclusion Facility to make catalytic investments in support of innovative ideas such as the Africa Fintech Hub Project, which aims to increase access and utilisation of digital financial solutions to meet the needs of all Africans.
Dr. Segun Aina, President of Africa Fintech Network, praised the bank for its support of the initiative. “We are truly excited about this partnership with the African Development Bank, as well as the possibilities of working with Cenfri on multiple initiatives with fintech across Africa to further our mission to drive Africa-led fintech solutions, stimulate information exchange, ideation, and support, and promote innovative technologies within the financial services sector across Africa and beyond.”
Sheila Okiro, ADFI Coordinator, stated that the Bank is delighted “to support this project to strengthen the fintech sector, furthering our work to leverage technology to contribute to closing the financial inclusion gap and creating employment across Africa.”
ADFI-supported projects are currently improving digital financial infrastructure and regional interoperability in Ethiopia and the ECOWAS region through the development of payment systems and infrastructure. Other projects are providing innovative technology to financial sector regulators in Ghana, Rwanda, and Zambia to strengthen consumer protection.
The Facility is also supporting projects to enhance the deployment of digital micro-insurance to smallholder farmers in Nigeria, Zambia, and Kenya, as well as to build capacity for cyber resilience and help to remove barriers to access to fintech services across the continent.
How the New Hub Will Benefit the African Fintech Ecosystem
The Africa Fintech Hub’s establishment is timely, as the African fintech sector lags behind that of other regions such as Latin America and Southeast Asia. According to a 2019 survey conducted by AFN and Cenfri, women own less than 15% of African fintechs. This statistic is concerning, given that studies have shown that increasing women’s access to financial services can lead to better economic outcomes for households, communities, and countries. As a result, as a core component of project implementation, the Africa Fintech Hub will develop and apply gender indicators and lenses to ensure that women-led or owned fintech startups are included in the platform.
The inclusion of women-led or owned fintech startups in the Africa Fintech Hub is critical because it promotes gender equality and contributes to the continent’s financial inclusion. In Africa, women are more likely than men to be financially excluded, with only 34% of women having access to formal financial services compared to 45% of men. The Africa Fintech Hub will contribute to closing this gap by providing a platform for women-led or owned fintech startups to showcase their solutions, connect with potential investors and partners, and gain access to technical assistance and funding opportunities. This will contribute to an increase in the number of women-led or owned fintech startups in Africa, resulting in greater financial inclusion on the continent.
The Hub will Encourage Collaboration
Moreover, the Africa Fintech Hub will help to promote innovation in the fintech sector and contribute to the development of a robust, efficient, and sustainable fintech ecosystem across the continent. The platform will enable fintech associations across Africa to pool resources and knowledge, strengthen relationships and partnerships, as well as showcase the work of fintech on the continent. This will create an environment for collaboration and innovation, which will help to accelerate the growth of fintech startups in Africa.
The Africa Fintech Hub will also contribute to increased digital competitiveness by leveraging partnerships to create a thriving fintech ecosystem. The African Development Bank recognizes that it has a significant role to play in fostering a robust, efficient, and long-term fintech ecosystem across the continent. This is why, through its various innovative interventions, it is accelerating the delivery of its High 5 strategic priorities. These interventions have aided in the improvement of access to digital infrastructure, such as ICT links to landlocked countries and broadband internet services. As countries across the continent seek closer collaborations, the need to break down barriers and scale up inclusive digital financial solutions to accelerate economic resilience across Africa has become even more pressing.
Finally, the establishment of the Africa Fintech Hub is an important step toward promoting gender equality, deepening financial inclusion, and boosting innovation in the continent’s fintech sector. The platform will ensure that women-led or owned fintech startups are included in the ecosystem by developing and applying gender indicators and lenses as a core component of project implementation. This will increase the number of women-led or owned fintech startups in Africa, resulting in greater financial inclusion on the continent. Furthermore, the platform will allow fintech associations from across the continent to collaborate.