Continued digitalization in Middle East and Africa is key to advancing financial inclusion, according to an outlook report by Mastercard Economic Institute.
This is especially relevant in regions such as East Africa, where IMF research found that even where financial inclusion through traditional banking services was declining, expanded access to digital tools and services increased financial inclusion.
The trend is set to continue in 2021, especially in the more digitally advanced economies such as Ghana, Kenya and Uganda.
Kenya is among leaders in the region in accelerated digital transformation, with online and mobile money platforms helping to improve financial inclusion levels in the country.
According to the Mastercard report dubbed ‘Economy 2021’, the need to bring the population into the digital economy first through online banking solutions is paramount to delivering growth over generations to come.
Fintech disruption in online banking is set to be a key driver for this, especially in East African economies.
Brick-and-mortar business creation is expected to decline further in 2021 in favour of online business creation and the adoption of initiatives that connect a merchant’s sales data with access to capital.
Another aspect of advancing financial inclusion highlighted by Economy 2021 is leveraging cutting-edge technologies to connect consumers to small businesses and micro-merchants.
As digital innovation improves and internet access increases, digital payment solutions such as contactless, virtual card numbers and Quick Response codes offer more possibilities than ever before.
A key success factor for regional economies when it comes leveraging the growth of e-commerce and advancing financial inclusion is the young and fast-growing populations across MEA.
Mastercard has been working to bridge the financial inclusion gap through a broad range of efforts, including partnerships with mobile network operators and ongoing work on government disbursement solutions.
It has been supporting wage digitization of private sector workers, solutions for gig workers, scaling efforts with telcos via their digital platforms and digital wallets.