The African Development Bank alongside donor partners has launched the Africa Digital Financial Inclusion Facility (ADFI), an innovative financing facility designed to accelerate digital financial inclusion across Africa.

ADFI is structured as a blended finance vehicle composed of a multi-donor special fund with a target envelope of $100m and resourced with donor’s grant money and debt funding of up to $300m from the African Development Bank.

ADFI currently has committed funding of $40m from three initial donors: The Bill and Melinda Gates Foundation (BMGF), The Government of Luxembourg and Agence Française de Développement.

The special fund has an investment horizon of 10 years.

ADFI will intervene along four key pillars aimed at scaling innovative digital financial inclusion and increased integration throughout the continent.

This will include infrastructure, including payment systems development and payment systems interoperability; digital products and innovation; policy and regulatory reform and harmonisation; and capacity building.

The goal is to ensure that 332 million more Africans, of which, 60% are women, have access to the formal economy.

Digital financial services are emerging as a powerful force for financial inclusion, gender equality and inclusive economic growth. For consumers in low and middle-income countries, digital financial tools, such as mobile payment systems, provide a gateway to greater economic security, empowerment and opportunity.

Although there is a growing ownership of mobile phones in Africa, the benefits of digital financial inclusion have not been fully harnessed.

By 2030, the ADFI fund and the Bank will deploy up to $400m in the form of grants and loans to scale up digital financial services to various entities including banks and non-bank financial institutions, mobile network operators, remittance and payment service providers, fintech companies, government ministries, regulatory bodies and regional economic organizations.

AfDB said that “ADFI-funded projects will demonstrate a positive impact on the livelihoods of low-income consumers and in particular on women and vulnerable communities through the provision of suitable and sustainable products and services. ADFI-funded projects will also directly contribute to the economic integration of Africa through provision of scalable interoperable payment systems both nationally and regionally”.