The last part of this publication discusses some strategic issues and options related to the design and implementation of the financial inclusion agenda in Africa. These encompass the transformative role that technology could play in achieving greater financial inclusion, the need to reconcile financial inclusion and financial stability, lessons that Africa could learn from other developing regions, and the role of Development Finance Institutions (DFIs). Africa has been at the forefront of mobile financial services. Issa Faye and Thouraya Triki discuss in chapter 7 how technology could be a game changer in advancing the financial inclusion agenda in Africa. They describe the state of mobile financial services on the continent, looking 28 at the number of mobile deployments, business models that have been used, and comparing the cost of such services to the cost of comparable conventional financial services. The chapter also examines the role that other technology-based solutions such as Automated Tellers Machines (ATMs) and Points of Sale (POSs) could play to promote inclusive financial systems in Africa. The authors also document main barriers preventing the development of technologybased financial services and conclude by recommending the implementation of more flexible regulatory frameworks to foster innovation and the promotion of mobile Government-to-Person payments (G2P).
DFIs have been often cited as one of the key players to advance the financial inclusion agenda. In chapter 8, Isabella Massa documents what DFIs have been doing in Africa to improve financial inclusion for households and SMEs, as well as their support to financial infrastructure. She documents the number of financial inclusion-related operations implemented by DFIs, the types of instruments they have been using, and compares involvement of different DFIs. She concludes that despite current achievements, more effort is needed from DFIs in terms of provision of capacity-building and advisory services to push the financial inclusion agenda forward. She also points out to the necessity for greater transparency in reporting DFIs’ interventions to allow proper assessment of their development effectiveness in the area of financial inclusion. The implementation of innovative solutions for financial inclusion could pose challenges to regulators and supervisors and threatens systems’ stability. In chapter 9, Pietro Calice describes how financial inclusion can contribute to maintaining a sound and stable financial system if managed properly. He uses the South African experience to substantiate this view. He also suggests a framework that provides guidance on the regulatory approach that is likely to maximize both financial stability and financial inclusion.
What can Africa learn from the experience of other developing regions? In chapter 10, Andrea Reyes Hurtado, Ana María Torres and María Luisa Hayem compare the state of financial inclusion in Latin America and the Caribbean (LAC) with the one in Africa and describe some innovative models, such as agent banking, that have contributed to fostering inclusive financial systems in LAC. They describe potential lessons to be drawn from LAC that could help to move the financial inclusion agenda in Africa forward. These include the importance of government’s commitment, the fact that addressing demand-side constraints is equally important to supplyside constraints, and the need to promote innovation.