Dr. Akinwumi Adesina, the President of the African Development Bank, gave a compelling keynote address. His insights shed light on the programme’s theme “Fintech: Resilience, Innovation, & Diversification” in the fintech industry, not only in Nigeria but across the entire African continent and the global fintech arena.

Nigeria Fintech Week has evolved into a pioneering event for financial sector leaders, not just within Nigeria but on a global scale. It serves as a platform for dialogue and collaboration between industry leaders, offering a unique opportunity to explore the latest trends and developments in fintech.

“The theme for this year’s Fintech Week, ‘Resilience, Innovation, and Diversification,’ resonates particularly with the current global economic landscape,” Adesina said speaking through Lamin Barrow, the Director General of Nigeria, African Development Bank (AfDB).

“Fintech companies are grappling with the need to adapt to rapidly changing conditions, particularly in the wake of global economic downturns characterized by volatility and heightened uncertainties. These challenges are particularly evident in Nigeria and other African nations, with manifestations in macroeconomic instability, rapid forex depreciation, and rising inflation. Consequently, Africa’s GDP growth has seen a decline, estimated at 2.8% in 2022, down from 4.8% in 2021.”

In light of these challenges, the need for resilience through innovation and product diversification has never been more urgent. The fintech sector in Africa plays a major role in building this resilience by driving financial inclusion across the continent. “Recent studies indicate that 33% of adults in sub-Saharan Africa have mobile money accounts, the largest of any region globally.”

Mobile Money Revolution

Speaking further, Dr. Akinwumi Adesina noted that the 2022 GSMA report highlights that Africa now accounts for 621 billion registered mobile money accounts, representing 46% of the global total and approximately 70% of the world’s $1 trillion mobile money transactions in 2021. The spread of mobile money accounts has opened doors to better serve underserved populations traditionally excluded from the formal financial system.

“The COVID-19 pandemic underscored the significant role digital technologies can play in managing shocks. Continents with advanced digital financial service ecosystems were able to scale up emergency cash transfer programs, demonstrating the resilience of fintech in addressing critical societal needs.”

Fintech Beyond Banking

African fintechs extend their impact well beyond banking and payments. From healthtech solutions that make healthcare accessible with just a click, to agritech platforms connecting farms to markets and providing real-time weather forecasts, and affordable education services, innovation is driving inclusion and addressing various societal needs.

Global Investor Attraction

African fintechs’ capacity to innovate has attracted global investors. “Reports from Disrupt Africa and the International Finance Corporation reveal that there were 26 reported fintech acquisitions in Africa between June 2021 and July 2022. In 2021, 63% of tech funding in the continent, amounting to $2.7 billion, went to the fintech industry,” Dr. Akinwumi Adesina highlighted.

Nigeria’s Growth Potential

As the hub of the African fintech industry, Nigeria has seen the emergence of five of the 11 digital companies that have reached unicorn status. To witness significant growth in the fintech industry, Nigeria must further integrate technology into business activities. This necessitates domesticating the Startup Act and implementing regulatory reforms to simplify procedures for cross-border trade transactions, enhance access to finance for startups, and accelerate SME integration in e-commerce.

The African Development Bank’s Commitment

The African Development Bank strongly believes that a resilient, innovative, and diversified fintech sector is key to accelerating economic transformation in the continent. The bank is actively supporting African countries in bridging digital infrastructure and knowledge gaps, creating a conducive business environment to promote entrepreneurship and innovation in the fintech industry, and upskilling the youth to prepare them for the jobs of the future.

Since 2012, the African Development Bank has invested approximately $2 billion in 40 innovation and ICT projects across the continent. Notably, this includes $170 million in financing for the investment in digital and creative enterprises projects in Nigeria, a significant component of which is the establishment of venture capital funds to support startups in the digital creative industries.

Dr. Akinwumi Adesina’s keynote address at NFW Day 1 emphasized the key role that fintech plays in Africa’s economic development. In fostering resilience, innovation, and diversification, the fintech industry addresses economic challenges and also provides innovative solutions to improve the quality of life for people across the continent. 

The African Development Bank’s commitment to this sector further emphasizes the transformative potential of fintech in Africa. 

The post Nigeria Fintech Week: Keynote Address by Dr. Akinwumi Adesina, President of the African Development Bank appeared first on Tech | Business | Economy.

The Africa Digital Financial Inclusion Facility (ADFI) will provide funding and technical assistance to the Africa Fintech Network to host and manage the African Fintech Hub. The hub is a digital platform that 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, including those which are female-led or owned.

The African Fintech Hub will be delivered through a strategic partnership between AFN and the Centre for Financial Regulation and Inclusion (Cenfri), which will provide technical support in the development of the Hub, as well as promote research, knowledge creation and other innovative initiatives.

Lamin Barrow, Director General of the African Development Bank’s Nigeria Country Department, underscored the importance of the Bank’s support to the project, saying it would contribute to strengthening the fintech ecosystem in Africa, boost competitiveness in the digital world, whilst leveraging 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 our 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.”

The African Development Bank, together with its partners, launched the Africa Digital Financial Inclusion Facility to make catalytic investments in support of innovative ideas such as the Africa Fintech Hub Project aimed at expanding access and usage of digital financial solutions to meet the needs of all Africans.

Dr Segun Aina, President of Africa Fintech Network, commended the Bank for supporting the  initiative. “We are truly excited about this partnership with the African Development Bank, and the possibilities of working in partnership with Cenfri on multiple initiatives with fintech across Africa to further our mission to drive Africa-led fintech solutions, stimulate information exchange, ideation and the support and to promote innovative technologies within the financial services sector across Africa and beyond.”

ADFI Coordinator, Sheila Okiro, said the Bank, through the partnership of the Africa Digital Financial Inclusion Facility, 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.”

Currently, ADFI-supported projects are enhancing digital financial infrastructure and regional interoperability through the development of payment systems and infrastructure in Ethiopia and the ECOWAS region. Other projects are equipping financial sector regulators with innovative technology to strengthen consumer protection in Ghana, Rwanda and Zambia.

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.

Although fintechs have great potential to contribute to digital financial inclusion across the continent, the African fintech sector significantly lags behind those in other regions such as Latin America and South-East Asia.

In 2019, AFN and Cenfri conducted a survey that demonstrated the need to establish and coordinate local fintech chapters, recruit new members, profile members’ achievements, link them to market access and investment opportunities, as well as advocate on behalf of members to local and regional regulators.

The survey also shows that less than 15% of fintechs are owned by women. Based on the result of the survey, AFN will develop and apply gender indicators and lenses as a core part of the project implementation.

The post New Africa Fintech Hub to Stimulate African Fintech Growth  appeared first on Tech | Business | Economy.

The fund will enable FSDH to work towards ensuring the growth of SMEs in Nigeria, providing loans — which are otherwise inaccessible and in turn causing limitations — to stimulate their progress.

The Bank will also guarantee up to 100% of non-payment risks arising from letters of credit and similar trade finance instruments issued by FSDH under the guarantee portion. This will allow confirmation of trade transactions originated by FSDH, benefiting local import and export businesses.

Overall, the facility will catalyze more than $200 million of trade finance transactions across multi-sectors, including agriculture, manufacturing, and energy over the next three years.

The African Development Bank’s Director General for Nigeria, Lamin Barrow said: “The availability of trade finance instruments to drive post-pandemic economic recovery efforts cannot be overemphasized. Hence, the Bank’s financing will help eligible Nigerian SMEs to take advantage of existing and emerging opportunities in the domestic and regional markets.”

The African Development Bank estimates the trade finance gap for the continent at $82 billion. SMEs and other domestic firms have greater difficulty accessing trade finance than multinational and large local corporates.

Barrow noted that the Covid-19 pandemic and other factors had led global banks to reduce their correspondent banking relationships in Africa or to exit completely.

The facility aligns with the African Development Bank’s Financial Sector Development Policy and Strategy to deepen Africa’s financial systems. It also aligns with two of the Bank’s High 5 strategic priorities: ‘Feed Africa’, and ‘Industrialize Africa.

The Bank’s Director for Financial Sector Development, Stefan Nalletamby said, “We are excited about finalizing this facility with FSDH as having the Bank as a partner will aid FSDH in scaling up its trade finance offerings in Nigeria to help meet the ever-increasing trade finance gap. This partnership is expected to catalyze more than $200 million value of trade finance transactions across multi-sectors such as agriculture, manufacturing, and energy over the next 3.5 years.” 

The African Development Bank anchors its current Nigeria strategy on two pillars: supporting infrastructure development and promoting social inclusion through agribusiness and skills development. The Bank believes there are numerous opportunities for the youth and women from its financing and non-lending activities.

The Bank’s current portfolio in Nigeria comprises 53 operations with a total value of $4.5 billion. This is made up of 30 sovereign operations, with a value of $2.7 billion and representing 60% of total commitments. In addition, there are 23 non-sovereign operations valued at $1.8 billion.

The post AfDB to Support FSDH with $25m to Finance Nigerian SMEs appeared first on Tech | Business | Economy.