The average growth rate of African economies GDP was more than five percent a year since 2004, and many of those are expected to reach in 2060 the group of middle- and high-income. However, this vision can not be achieved without a strong financial sector, developed and competitive. In particular, a financial system that works well is essential to achieve sustainable and inclusive growth.
The financial sector in Africa has made ​​considerable progress in terms of development and stability. Many African countries have made ​​progress in reforming their institutional framework and creating an environment for better access to financial services. An increase in the penetration rate is observed in several African countries through innovative business models such as mobile banking.Nevertheless, many challenges remain. For financial services more available, accessible, affordable and inclusive therefore, necessary to develop innovative financial instruments and operational financial infrastructure for the benefit of disadvantaged and vulnerable groups.
In a recent book entitled “Financial Inclusion Africa “(co-edited by Thouraya Triki and Issa Faye), we document the state of financial inclusion in Africa and provide policy makers, the financial sector and development actors with precise information on the opportunities and specific challenges that deserve attention and action. While access to financial services has improved considerably in African countries, many individuals and businesses are still excluded from formal financial systems. the book also notes that less than a quarter of adults in Africa have an account at a formal financial institution, and many adults in Africa use informal methods to save (as tontines, burial funds, etc.) and borrowing (friends, family and informal moneylenders). Nevertheless, the success of some innovative financial instruments such as the Mobile-banking in East Africa offers more opportunities for financial inclusion, especially for the poor, women, youth, people living in areas rural and small and medium enterprises (SMEs).
a novelty of this publication is her analysis of the impact of political instability and economic vulnerability can have on the ability of households and SMEs to access different types of financial services. According to the book, only 14 percent of adults living in fragile states in Africa have an account at a formal financial institution. Given the high risk for some African countries to be in a situation of fragility, the book advocates that it is imperative that effective and sustainable financial inclusion is part of the national reconstruction strategies. The book also encourages greater coordination among development partners in a contextualized approach, flexible and adapted to financial inclusion in fragile states.
For that financial inclusion becomes an engine of inclusive and sustainable growth in Africa; authors provide a series of strategic options for transforming role that technology can play in achieving greater financial inclusion, the need to balance financial inclusion and financial stability, the lessons that Africa could learn other developing countries, and the role of development finance institutions (DFIs) to assist in designing and implementing financial inclusion programs in Africa. The main messages of the book are:
Mobile financial services can help Africa reach a larger and more inclusive development. In fact, financial inclusion has the potential to stimulate domestic savings, increases in incoming remittances from the diaspora, and reduce transaction costs for SMEs and the private sector by reducing the number of households and businesses financially excluded in Africa.
financial stability and financial inclusion could be complementary goals. To ensure an inclusive regulatory strategy, financial regulators should adopt a framework that will achieve financial inclusion while preserving stability and taking into account the regulatory requirements inherent in the different functions of the financial services industry.
The models innovative and profitable business implemented by other developing countries (eg in Latin America) to expand access to financial services for low-income households could inspire African governments and other stakeholders to achieve greater financial inclusion in Africa. A notable example is the model of branch.
The FDIs are becoming key players in promoting financial inclusion in Africa. To enhance the impact of their actions on development, it is necessary to promote greater collaboration between them; provide them with more resources and expertise to promote capacity building activities, and strengthen training and catalytic effects of their financial inclusion projects should be the standard.