The UK government is piloting a programme that will link tech communities in the UK and Africa to accelerate the adoption of financial services and create a platform for future trading.
If successful, the Department for International Trade (DIT) programme, known as Tech for Growth, will be expanded to countries in South East Asia and Latin America.
In the first 12 months, a UK-Africa Tech for Growth community will be set up to help increase access to financial services to the unbanked in Africa, with partnerships between British and African tech and finance firms promoted.
It will also try to increase financial technology (fintech) trading between the UK and Africa and work with African governments and regulators to grow their technology sectors.
Gerry Grimstone, UK minister for investment, said the UK offers expertise in tech and financial services, making it an ideal base for firms offering financial services technology.
“This programme will further deepen our trade relationships with some of the most exciting emerging markets around the world, and lead to solutions that address one of the most prominent global challenges in today’s world – financial inclusion,” he added.
There are around 1.7 billion unbanked people in the world, but as the availability of mobile phones increases, services are being developed to give them access to banking services.
For poor communities, access to financial services is vital to enable them to become economically active. For example, it can help farmers get paid for their produce, buy fertiliser and receive subsidies. It could also help a woman in Africa with a mobile phone could receive a salary payment, send money to other wallets, buy things, pay bills and receive social security.
Emma Wade-Smith, HM trade commissioner for Africa, said: “With mobile phone penetration rates having risen to over 40%, technology can play an increasing role in expanding access to financial services and other sectors.”
There are already major mobile-based financial services projects in the developing world attempting to give poor people access to services. For example, the Bill and Melinda Gates Foundation is a major force in assisting projects to increase financial inclusion in the developing world. Projects in Africa and Asia are being assisted by the organisation.
The foundation has already supported the go-live for the mCash in Bangladesh and is supporting a project to help create national real-time payments platforms in Pakistan and Tanzania. A mobile project covering eight West African countries is expected to be rolled out this year.
Some of the projects use the Mojaloop open source software developed by Ripple, Dwolla, ModusBox, Software Group and Crosslake Technologies for the Gates Foundation.
These services are being run commercially, which means they can be sustained without external contributions.
Read more about the Gates Foundation’s work in financial inclusion tech
- Mobile banking can help the poor change their lives and two billion people who don’t have bank accounts store money by phone by 2030.
- Kosta Peric swapped a life innovating for banks to work on increasing financial inclusion in the developing world.
- Mobile money projects aim to give millions of the world’s poorest people access to financial services.