RFF Africa 2018: Investing in Responsible Finance and Innovation for Africa’s Digital Economies

IFC in partnership with BMZ and Making Finance Work for Africa hosts first Responsible Finance Forum in Africa, Boosts Support for Responsible Digital Finance Investments

Dar Es Salaam, October 1-2, 2018 — IFC a member of the World Bank Group, held the Ninth Annual Responsible Finance Forum (RFF) funded by the German Ministry for Economic Cooperation and Development (BMZ), and its first ever to be hosted in Africa. The meeting saw signatories to the Guidelines for Investing in Responsible Digital Financial Services – an initiative launched jointly by IFC and leading investors and digital finance innovators in June 2018, grow to 80 organizations, proving a major boost for this strategically important initiative.

The RFF gathered together leading investors, policymakers and practitioners to assess critical challenges in financial services in Africa where large number of women, rural poor and MSMEs remain financially excluded. Over 140 participants from 30 countries in Africa, including representatives from central banks and insurance regulators took part in plenary and deep-dive sessions to explore the latest initiatives, business models and fintech innovations to advance responsible investments in digital financial services.

Opening the Forum, IFC’s Manager of Digital Finance and Microfinance, Martin Holtmann said: “This Forum is happening at a critical juncture for Africa, to revisit how we provide finance for all, including for the persistently underserved using technology as a solution, along with responsible investments to help mitigate digital finance consumer risks. We welcome the new signatories to the Investor Guidelines, which plays a key role in helping us to accelerate investments that create value-added benefits for digital finance customers and broader digital ecosystems and catalyze investments in responsible digital innovation.”

David Ashiagbor, Coordinator of Making Finance Work for Africa Partnership said in his opening remarks: “Central to our work in financial inclusion is to promote an enabling environment that protects consumers on the one hand, and fosters innovation and competitive markets on the other. Both aspects are closely link by the fundamental prerequisite of a well-functioning financial sector: ‘trust’. Building consumer trust is key for achieving sustainable uptake and active usage of digital financial services”.

Leveraging technology and digital innovation is key to improving access beyond traditional financial sector providers and newer entrants are rapidly disrupting the landscape, making it easier than before to expand access to financial services to hard-to-reach populations and small businesses. While opportunities have increased, so have risks for digital financial services, particularly for the lower income customers in rural, nascent, fragile and conflict affected markets.

Industry deep dives relevant to Africa’s evolving digital landscape were facilitated by RFF partners namely CGAP, GIZ, and UNCDF/BTCA — each covering respectively: value driven uses of digital financial services and the role of customer empowerment; data analytics and consumer data protection; and regulation and new industry standards evolving, such as the GSMA’s Mobile Money Certification scheme and Fintech Protects  initiative at the Smart Campaign and the Center for Financial Inclusion at Accion.

The Guidelines for Investing in Responsible Digital Financial Services are aligned with IFC’s broader efforts for Investing for Impact: Operating Principles for Impact Management unveiled at the World Bank Group Annual Meetings in Bali, along with an invitation for additional reviews from stakeholders through the end of the year.  The Investing for Impact Principles will also be available for investors to become signatories, with the first set to be announced at the Spring Meetings in April 2019.

The Guidelines focus more specifically on embedding consumer protection into digital financial services and incorporate IFC’s due diligence practices for digital users and customers into investments. The goal of the signatories is to strive to catalyze investments in responsible digital innovation and work with industry and technology leaders as partners to fine-tune evolving solutions and share emerging evidence and business models for inclusive growth. The Guidelines cover investors, investees, innovators and the fintech and broader digital financial services industry; it looks at the risks digital consumers face, how this drives businesses, and the development of digital economies for broader impacts.

Responsible finance has been an important topic since the 2008 financial crisis, and a cornerstone of the World Bank Group’s Universal Financial Access goals, contributes to the United Nations’ Sustainable Development Goals.  “Potential Actions” underlying each statement of the Investor Guidelines are anchored in the G20 High Level Principles for Digital Financial Services developed with China as holder of the G20 Presidency in 2016 and remains a priority of the G20 Global Partnership for Financial Inclusion (GPFI).

Representing GIZ, Judith Frickenstein stated: “It is a timely opportunity to have this year’s focus on Africa’s digital landscape, building on last year’s RFF in Berlin, which looked at the Opportunities and Risks in Digital Financial Services: Protecting Consumer Data and Privacy. To gain new perspective, this year’s RFF provides a very welcome inclusion of the investor’s perspective to deepen our understanding of industry standards and solutions as well as the relationship between public and private sector roles and responsibilities.”

Lianne Houben, Deputy Ambassador at the Embassy of the Kingdom of the Netherlands in Dar es Salaam, on behalf of the Dutch Ministry of Foreign Affairs, gave encouraging words of support along with a call to action for investors, innovators and industry, to become a Signatory to the Guidelines for Investing in Responsible Digital Financial Services.

IFC has helped to facilitate the RFF for over a decade, alongside IFC’s inaugural partners, the German Federal Ministry for Economic Cooperation and Development (BMZ) and the Netherlands Ministry of Foreign Affairs as funders from the beginning, as well as GIZ and the Consultative Group to Assist the Poor (CGAP).  IFC and Making Finance Work for Africa based at the African Development Bank, co-led this year’s collaboration with its RFF partners at CGAP, GIZ, UNCDF/BTCA and the World Bank.

About IFC
IFC—a sister organization of the World Bank and member of the World Bank Group—is the largest global development institution focused on the private sector in emerging markets. We work with more than 2,000 businesses worldwide, using our capital, expertise, and influence to create markets and opportunities in the toughest areas of the world. In fiscal year 2018, we delivered more than $23 billion in long-term financing for developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity. For more information, visit www.ifc.org.

About BMZ
The German Ministry for Economic Cooperation and Development (Bundesministerium für wirtschaftliche Zusammenarbeit und Entwicklung or BMZ) works to encourage economic development within Germany and in other countries through international cooperation and partnerships. It cooperates with international organizations involved in development including the International Monetary FundWorld Bank, and the United Nations. For more information, visit www.bmz.de/en.

About Making Finance Work for Africa
The Making Finance Work for Africa Partnership (MFW4A) was established as a platform for financial sector development research, advocacy, knowledge management and networking. We bring together African governments, development partners, the private sector, and other stakeholders to address financial sector development priorities on the continent. Our partners (AFDB, AFD, EIB, GIZ and the Ministry of Netherlands) share a common vision of innovation, robust and competitive African financial systems, providing near-universal access by 2030, and offering a full range of products and services for the continent’s real sector.  For more information, visit www.mfw4a.org.

About RFF
The Responsible Finance Forum (RFF) is dedicated to advancing new evidence, solutions and practices to achieve financial inclusion and digital innovation.  Since 2009, the RFF has been an annual milestone event that brings together the private sector, governments, practitioners, policy makers, academia, and consumers to share emerging best practices, concrete solutions and ongoing initiatives to scale up financial inclusion globally.  Launched in June 2018, the Guidelines for Investing in Responsible Digital Financial Services are on the RFF platform. For more information, visit www.responsiblefinanceforum.org.

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