AfDB signs grant agreement with Africa Fintech Network to unlock digital economy

By: Joseph Inokotong – Abuja

The African Development Bank (AfDB) has signed a grant agreement with the Africa Fintech Network (AFN) to support the Africa Fintech Hub project, an online portal that will provide a one-stop shop for all fintech activities in Africa.

At the signing ceremony on Tuesday in Abuja, Director General Lamin G. Barrow

The African Development Bank, Nigeria country branch said the $525,000 grant will support the operation of an online digital hub to serve as a repository of knowledge for fintech entities across the continent and globally.

He noted that the Digital Hub, to be delivered through a strategic partnership between the Africa Fintech Network and Cenfri, will help strengthen the fintech ecosystem across Africa, increasing the competitiveness of the industry.

Mr Barrow said: “This grant, in the amount of $525,000, will support the operationalization of an online digital hub to serve as a repository of knowledge for fintech entities across the continent and globally”.

The grant is funded by the Africa Digital Financial Inclusion Facility (ADFI), launched by the African Development Bank Group, together with its partners, the Bill & Melinda Gates Foundation, the Ministry of Finance of Luxembourg, and the Agence Française de Développement in 2019, with the French Ministry of Finance and Economy and The Women Entrepreneurs Finance Initiative (We-Fi) joined in 2020 and 2022 respectively.

According to Mr. Barrow, the event marked an important milestone in the AfDB’s efforts to promote digital innovation and financial inclusion in African countries.

“Although great strides have been made in bridging the financial inclusion gap in African countries, according to the 2021 Global Findex Study, 49% of Africans are excluded from the formal economy and the benefits it provides.

“Fintechs provide powerful, easily accessible and effective digital financial solutions to bridge the financial inclusion gap. Africa’s fintech sector also has a strong potential to contribute to job creation, given the strong presence of youth in these industries”, said Mr .Barrow.

With the current digital disruption in the financial sector, Mr. Barrow said more fintech startups are coming to the fore as they leverage technology to provide innovative financial services including payments, lending, savings, financial literacy and financial infrastructure services resulting in greater efficiency, better service provision and lower costs.

However, he pointed out that despite fintech’s potential to contribute to digital financial inclusion across the continent, the African fintech sector lags significantly behind those in other regions such as Latin America, South and Southeast Asia.

Dr Segun Aina President Africa Fintech Network (AFN) said in his opening remarks that AFN viewed the project as a launch pad for greater opportunities as it partners with the AfDB to deliver the Africa Fintech Hub.

He said on completion, the Hub will contribute significantly to the vision of catalyzing the digital economy in Africa as highlighted in the mantra – to innovate together and move forward as one.

“The hub will be delivered through a strategic partnership between AFN and Cenfri, with Cenfri providing technical support in hub innovations, research and associated knowledge creation and related initiatives”, Dr Aina explained.

He thanked the AfDB leadership under President Dr Akinwumi Adesina, for all transformational initiatives aimed at promoting the development of the African continent and for having faith in and recognizing the AFN as the voice of the fintech ecosystem in Africa.

Dr. Aina pledges AFN’s commitment to making the project a success, noting that “we will use resources and dedicate a significant portion of our board and management time to work directly on the project”.

The establishment of the Africa Fintech Hub will enable fintech associations across Africa to pool knowledge, strengthen partnerships and showcase their innovations and impact, including from women-led or owned fintech businesses, and the AfDB emphasized its commitment to the partnership with Africa Fintech Network to fully unlock Africa’s fintech potential and create a digital economy.

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