Accelerating Financial Inclusion in Africa: The Journey Toward Inclusive Instant Payment Systems

25 Mar

By Dr. Robert Ochola, Chief Executive Officer, AfricaNenda

Miriam wakes up early in her small village in rural Uganda, determined to make the most of her day. Her dreams are as vibrant as the fabrics she sews: to buy a second sewing machine, hire an assistant, and turn her small business into a reliable source of income for her family.

However, as one of Africa’s 400 million unbanked individuals, Miriam faces daily financial uncertainty. Without access to formal financial services, she stores her earnings in a tin box under her bed. This leaves her vulnerable to theft and damage, while making her income invisible to potential lenders. For millions like Miriam, financial exclusion stifles opportunities and limits their potential.

Imagine what Miriam could achieve with access to useful digital financial services like biometric payments (accounts), QR Codes, mobile banking, payments, savings, and credit? These tools could empower her to manage her finances more securely, grow her business, and build a better future for her family. This vision highlights the need for transformative financial infrastructure that goes beyond the current systems in place.

Learning from the Past: Britain’s Financial Evolution

History offers valuable lessons for Africa’s journey towards financial inclusion. In 19th-century Britain, during the industrial revolution, much of the population relied on informal financial practices. They stored money under floorboards or in cash boxes, with no access to the financial tools that could help them build savings and, eventually, wealth.

The English journalist and essayist Walter Bagehot chronicled in his 1873 work, Lombard Street, how the Bank of England and joint-stock banks revolutionized the financial system. By instilling public trust and providing a safety net during crises, they encouraged people to deposit their savings into formal financial institutions. The results were transformative. Between 1870 and 1890, bank deposits in England and Wales surged from £150 million to £400 million. These funds financed industrial expansion, infrastructure projects, and international trade, lifting millions out of poverty and positioning Britain as a global economic power.

The lesson is clear: financial inclusion is a catalyst for growth and a gateway to prosperity.

The Mobile Money Revolution: Progress, But Not Enough

In the early 2000s, Africa began a similar financial revolution with the advent of mobile money. Platforms like M-Pesa in Kenya and MTN Mobile Money in Uganda brought basic financial services to millions who had never stepped inside a bank. These innovations bridged gaps for the unbanked and offered a lifeline to those underserved by traditional banks due to high fees or geographic barriers. By 2021, 33% of adults in Africa had mobile money accounts, according to the Global Findex, and GSMA reported that Sub-Saharan Africa accounted for 65% of global mobile money transactions in 2023, totaling over $910 billion. Echoing the experience of 19th Century England, mobile money is motivating more adults to save using an account.

Despite this progress, mobile money has not yet reached everyone. Many people remain unconvinced that mobile money offers a better alternative to cash, while limited interoperability between mobile money providers and banks diminishes its value. Interoperability—the ability to transact seamlessly across different financial platforms—is crucial, as digital payments often serve as a gateway to broader financial services like credit, insurance, and savings. Without inclusive systems, mobile money is only a partial solution for people like Miriam.

The Promise of Inclusive Instant Payment Systems

The next phase in Africa’s financial inclusion journey lies in building Inclusive Instant Payment Systems (IIPS). These systems go beyond basic Instant Payment Systems (IPS) by embedding inclusivity into their design. As highlighted in the State of Inclusive Instant Payment Systems (SIIPS) 2024 report, IIPS are defined by their accessibility, affordability, and interoperability.

IIPS function as essential infrastructure—like mobile networks or electricity—that empower everyone to participate in the formal financial system. By making digital payments universally available and affordable, they encourage more Africans to adopt financial services beyond basic payments. This could enable millions to open digital wallets, transact seamlessly, and access credit and savings.

Building IIPS requires collaboration among governments, financial institutions, and development organizations. Key priorities include:

Infrastructure investments to connect rural areas.
Regulatory reforms to promote interoperability and risk-based licensing for non-bank providers.
Public education campaigns to build trust and improve financial literacy.

AfricaNenda Foundation and the Vision for Miriam’s Future

AfricaNenda, a foundation dedicated to advancing financial inclusion, is at the forefront of the continent’s journey toward universal financial access. Over the past few years, significant strides have been made to foster financial inclusion across Africa. Key achievements include partnerships with the African Union Commission (AUC), United Nations Economic Commission for Africa (UNECA), and ongoing work with stakeholders in Rwanda, Cabo Verde, Guinea, South Sudan, and the CEMAC region. These efforts have laid the groundwork for a more inclusive and interconnected financial ecosystem across the continent.

One transformative focus has been promoting interoperability between payment platforms. For instance, Ghana has developed payment systems to equip and connect mobile money providers and banks and thereby allow users to transact seamlessly. Coupled with advocacy for low transaction fees and public education campaigns to improve financial literacy, these initiatives are ensuring that digital financial services become accessible and affordable for all, especially for underserved groups like women, youth, and rural communities.

Looking to the future for AfricaNenda and other partners within the continent’s payment ecosystem, the next phase is ambitious: to reaching an additional 260 million unbanked individuals by 2030. Achieving this goal demands unparalleled collaboration, cohesion, and collective commitment. The critical success factors driving this agenda include scaling technical support, driving innovation in payment systems, strengthening regional integration, mobilizing project funding, and empowering local financial service providers. Together, these factors contribute to a robust framework that ensures no one is left behind and unlocks economic opportunities for millions of Africans.

For Miriam and others like her, this vision translates into real possibilities. With access to digital wallets linked to interoperable payment systems, she can expand her business, access credit, and achieve financial stability. Her story reflects a brighter future where inclusive financial systems enable individuals and communities to thrive and contribute to the continent’s overall growth.

By prioritizing inclusion and innovation, these efforts mark a turning point in Africa’s financial journey—one where transformative systems not only empower individuals but also build a foundation for sustainable economic growth.

Building an Economically Transformed Africa: the role of the private sector

Miriam’s story is a powerful reminder that financial inclusion is not just about technology—it’s about people, businesses, and economies thriving together. For Africa to fully unlock its economic potential, private sector leadership is essential. African business leaders hold the keys to accelerating financial inclusion, and their actions today will shape the future of digital payments on the continent.

To make this vision a reality, we call on the private sector to take decisive action:

Making financial inclusion a business priority – Beyond corporate social responsibility, inclusive financial systems should be seen as a strategic opportunity. Expanding financial access can unlock new customer segments, increase revenue streams, and strengthen market resilience.

Championing interoperability in practice – Many financial service providers still operate in silos, slowing progress. Leading by example—embracing interoperability internally and advocating for industry-wide standards—can unlock seamless transactions and greater efficiency.

Investing in consumer trust and literacy – Even the most advanced systems fail if users don’t trust or understand them. Supporting initiatives that build confidence in digital payments, especially in underserved communities, is key to adoption and long-term impact.

Driving collaboration and knowledge-sharing – The financial ecosystem thrives on cooperation. Stronger partnerships between banks, fintechs, mobile money providers, and regulators will help break down barriers and accelerate innovation.

Establishing industry-led working groups – Addressing persistent financial inclusion challenges requires collective action. Dedicated platforms for sharing insights and co-creating practical solutions can help drive meaningful change.

Aligning on high-impact regulatory and policy support – Engaging with policymakers to foster frameworks that encourage innovation, reduce costs, and expand access will shape the future of financial inclusion.

Financial inclusion isn’t just a social imperative—it’s an economic game-changer. The moment to act is now.

George Meadows