London: Access to Finance Rwanda today, January 20, welcomes a £6m commitment from UK Aid, part of a £320m package that will initiate an ambitious new phase of financial sector development across the continent.
Announced ahead of the UK-Africa Investment Summit in London, the package includes additional funding for 9 existing Financial Sector Deepening Programmes [FSDs] and to set up and scale new FSDs in high-priority markets, including Ethiopia, Ghana, Sierra Leone and the West African Monetary Union.
The new commitment, announced by Secretary of State Alok Sharma, represents the start of an important new approach to financial sector development in sub-Saharan Africa. The package from UK Aid recognises that a comprehensive, integrated approach to financial market development in Africa is required to realise the continent’s potential and help meet the United Nation’s global goals.
The £320m commitment provides funding for ambitious programmes that create financing solutions for the opportunities and challenges faced across Africa’s economies, from individual households and micro-enterprises to business and infrastructure investment.
This means addressing the entire system of finance from savings groups to capital market development, and operating more closely to the interface between finance and the real world.
UK International Development Secretary Alok Sharma said: “Africa’s substantial investment potential is clear, with many African countries outstripping global economic growth in recent decades. The UK is already the top financial exchange for Africa’s businesses and we want investors to seize the exciting opportunities that Africa offers. These new initiatives, announced ahead of the UK-Africa Investment Summit, will make it easier, greener and more secure to invest in Africa, mobilising billions of pounds of sustainable investment to help end poverty.”
On behalf of UK Aid, the Government of Rwanda and other development partners, AFR has supported the development of an inclusive financial sector since 2010 in collaboration with financial service providers, regulators and policymakers.
To date, AFR has facilitated access to finance for more than 2 million Rwandans working hand in hand with key market players. The country has seen more than 89% of its adult population financially included and aims to reach lower-middle-income status by 2024.
This will require increased investment, growth and output in job-rich sectors. Access to Finance Rwanda realizes that this goal relies in part on the financial sector becoming an effective facilitator of capital to different parts of the Rwandan economy.
To that end, AFR will increasingly focus on initiatives which will unlock finance and investment in agriculture and manufacturing, in order to create more and better jobs for most Rwandans. Apart from supporting a better market offer and uptake in these sectors, AFR will continue to incentivize the strategic use of technology for meaningful financial inclusion of the marginalized to ensure that no one is left behind while supporting financial stability and integrity.
‘We at AFR have an increasing recognition that financial systems are important not for their own ends, but rather to facilitate opportunity, growth and shared prosperity. We will therefore mobilise investment into sectors that can fuel economic transformation, reduce barriers for enterprises and strengthen mechanisms to ensure household resilience as well meaningful financial inclusion for marginalised and vulnerable groups mainly poorer rural women, youth, refugees and people with disabilities’, said AFR Country Director, Waringa Kibe.
‘This new and continued investment by UK Aid alongside other existing partners such as SWEDEN, Mastercard Foundation and U. S. Agency for International Development will support AFR to deliver on its mandate.’
The £320m package also marks an important step forward for the FSD Network. After nearly twenty years of operation and UK aid support, the FSD Network today comprises 9 active FSD programmes, with a strong track record of impact, unparalleled local insight with applied research, and a powerful network of relationships with local regulators, policymakers, industry bodies, and low-income households. The new FSDs will join the Network, enabling them to benefit from, and contribute to, continent-wide knowledge sharing and cross-border collaboration.
Betty Wilkinson, Chair of the FSD Network Council, commented on the commitment: ‘On behalf of the nine existing members of the FSD Network and those new FSDs in formation, our sincere gratitude to the UK Government for this generous, constructive, and thoughtful five-year commitment. We pledge to broaden and deepen our innovative work across Africa to make money work for low-income families, women, youth, the excluded, and those who need financial services the most.
This new package will enable us to apply finance – in all its forms – to the challenge of the Sustainable Development Goals. The FSD Network will enhance livelihoods for poor people; improve access to basic human services where finance is a barrier; and enable a sustainable future, particularly addressing the financial aspects of climate change and illicit capital flows’.