Covid-19 Pandemic Surge in Financial Inclusion in Africa

Covid-19 has helped expand digital financial services in Africa, which has benefited rapidly to low-income people and small firms in Africa, says the IMF. But there is plenty that needs to achieve to ensure maximum inclusion of post-COVID-19 to capture the 60% unbanked African people.

The Covid-19 pandemic has been a game-changer for digital financial services. Low-income people, companies such as betting brands, have significantly benefited from mobile money, fintech service, and online banking. In regards to this, substantial numbers of their customers had to use these services to fund their online betting accounts. Simultaneously, several numbers of people had to use these services to receive and make payments as the regular traditional banks are closed. According to a survey report by the IMF, 43% of people who are a bit skeptical of using online channels service for transactions, such as mobile, and fintech services skyrocket during the Covid-19 lockdown as most people had to consolidate to these services, the pandemic increase the use of these services.

Also, the lockdown, restriction of the traveling interstate, and social distancing have accelerated digital financial services in Africa. For example, Togo, a small west African nation of 8 million, quickly distributed emergency financial support to half a million people in less than two weeks using mobile phones the shift towards digital commercial service is evident in the region. For example, many African countries, Liberia, Kenya, are supporting this shift with measures such as lowering fees and increasing limits on mobile money transactions.

Simultaneously, the other sector that has adopted this shift is the betting brands that are also offering free deposits to customers using these services to top-up their online betting accounts. However, according to another report from the (IMF) International Monetary Fund, Africa, and Asia lead the way that measures the progress in 52 emerging markets and developing economies. Reports say digitalization increased financial inclusion between 2014 and 2017, even where financial inclusion through traditional banking services was declining. These are likely to have progressed more since then, Africa, with significant variation across countries in Ghana, Kenya, and Uganda are front runners in comparison. In most countries in Africa, digital payment services are evolving into digital lending as companies accumulate users’ data and develop new ways to use it for creditworthiness.

These have seen credit using digital platforms to directly connect lenders to borrowers double in value from 2015 to 2017, especially in Kenya, where several digital platforms offer customers the opportunity to take a loan using these services. As further helped increase the number of people who have access to financial assistance. In contrast, financial inclusion benefits the economies, and societies, companies, particularly the gambling industry. In contrast, it has helped shaped all sectors in Africa in which it has bridged the gap of the unbanked African people, particularly those in rural areas.

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