Digital Finance

Rural households particularly suffer from lack of formal financial services infrastructure. They face high transaction costs when they rely on informal financial service providers, direct costs such as transportation expenses to reach the nearest bank branch; as well as opportunity costs including the time spent on travelling or on waiting in queues before being served. In addition, most of them are exposed to high security risks by carrying cash.

Digital Finance has the potential to foster access to formal financial services for many individuals in emerging and developing countries. New digital banking business models are being developed and implemented worldwide, thereby widening its usage and improving the quality of financial services at a much lower cost and with greater convenience. The fast and wide spread of mobile phones, Automated Teller Machines (ATMs), Point-of-Sale (POS) terminals, and other devices make financial services much more accessible to previously excluded people or those who need them the most.

AFC has a longstanding record of performance and trust with central banks, regulatory agencies, financial institutions, as well as various key stakeholders across financial, telecommunication, and ICT sectors to drive this change. Our work focuses on the access, use, and quality of digital financial services both on the supply and demand sides.

For instance, AFC provided technical assistance to the Mozambican Central Bank to harmonize existing mobile money/ e-money and agency banking regulations into a unified regulatory framework. AFC also assisted the Bank of Kigali in Rwanda to configure, customize, and implement the online knowledge management platform for the first project for SME lending process digitalization in East Africa.

In Ghana, AFC designed the centralised agency banking business model for all the Rural Community Banks. In addition, AFC supported the Ghana Interbank Payment and Settlement Systems Limited (GhIPSS) in rolling out the national biometric payment infrastructure in rural areas, which aims to reduce the reliance on cash, mobilize domestic savings, simplify the access to banks, and reduce the cost of banking services delivery.

In Papua New Guinea, AFC supported the Centre for Excellence in Financial Inclusion in elaborating the country’s 2nd Financial Inclusion and Financial Literacy Strategy, including Digital Finance as a priority area. In Jordan, AFC focused on increasing the digital financial literacy and awareness on the benefits and risks of using digital financial services among the Syrian refugees and low-income Jordanians, who are often excluded from the formal financial sector.

Read more about AFC's work in digital financial inclusion here: