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Digitizing beneficial finances for Africa and the Middle East in 2025 (study)


Posted on
15.11.2018 at 20:18

According to a study by well-known Mckinsey, financial digitization will bring benefits to Africa and the Middle East by 2025 as it will promote the inclusion of 400 million new customers in the financial system, said Thursday at Dakar Thameur Hemdane, co-chair of Africa's participatory funding and the Mediterranean (FPAM) "Digitization of finance will bring benefits to Africa and the Middle East by 2025, as 400 million people will be recently included in the financial system." There will be new deposits of $ 758 billion. will be awarded to SMEs and individuals. "Reducing public spending and tax evasion for states will be $ 20 billion a year," according to a Mckinsey study quoted by Thameur Hemdane.

Co-President of Participatory Africa and Mediterranean (FPAM) participated in the Forum of crowdfunding in Africa, focusing on "financial innovation for development".

For his part, Laurent Gonnet, World Bank Financial Sector Specialist (WB), reviewed ongoing reforms to boost digitalisation in Africa and the Middle East.

The first reform is about interoperability because, according to Mr. Gonnet, "someone with an Orange Money account in Senegal must be able to make a deal with someone with a bank account in Côte d'Ivoire, so regional integration will take shape and there will be competition between mobile operators and banks ".

For him, this global market will develop the use of electronic money. That is why "the Central Bank of West African States (BCEAO) has set a 2 year horizon because this interoperability is a reality," he said.

In addition, Laurent Gonnet spoke about the regulation of payment means, which is urgent to modernize to capture the possibilities offered by digitization. In the opinion of this important specialist in the World Bank's financial sector, the bank's interim regime "will probably be at the center of a small banking revolution."

Indeed, he said, there is a phenomenal expansion of mobile network operators, such as Orange and Tigo, based on distribution agents to flood the financial market.

Banning conventional banks using this mode of operation may soon be a thing of the past. "Banks have only one possibility: the opening of an agency, we want to offer them the opportunity to recruit agents who could play the role of distributor of products." The World Bank and the Central Bank are currently working on the bank's interim regime, "Gonnet said.

In his analysis, the World Bank expert argued that "digital will have a larger scale in the banking sector, but banks are not yet equipped to reach the table by opening cheap accounts in remote areas."

Therefore, in order to take advantage of digitization, Laurent Gonnet encourages banks to study "the interesting success story of Banco Postal (Angola) that has benefited from a new regulatory regime to have agents instead of branches."

Also discussed was Fintech (financial technology companies). For their emergence on the continent, Laurent Gonnet hopes that "within 6 months or even 1 year, an agreement on Fintech's regulatory framework" will see the day.

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