Commitment comes as part of ambitious £320m UK aid package for strengthening Africa’s financial markets, to boost economic growth and reduce poverty at scale.
20 January 2020, London: FinMark Trust today welcomes a £10m 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 London, the package includes an overall additional £220m for 9 existing Financial Sector Deepening Programmes [FSDs] and £100m to set up and scale five new FSDs in high-priority markets, including Ethiopia, Ghana, Sierra Leone, Zimbabwe 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.” FinMark Trust, through its vision to Make Financial Service Work for the Poor has supported financial inclusion in SADC for the past 17 years. The evolution of this work, supporting the link between the real economy and financial inclusion will be the new focus with this UK aid programme.
Five areas have emerged as offering the best opportunity for FinMark Trust to support economic growth and the jobs agenda in the region, expand access to basic services and to help secure a sustainable future. These include the development of agric processing and agric value chains, building on our expertise in MSMEs to develop the capacity of enterprises in the light manufacturing and services industries and supporting Youth development and employment. ‘We will continue to reduce costs for Cross Border Remittances, to facilitate formalisation and digitisation for Informal traders, to expand inclusive digital financial services to increase access to basic and financial services, and build integrity in the region to support sustainability of the financial systems.
This includes using digital means to reduce cost, improve scale and convenience, as well as focus on savings as a potential area to extend access to insurance, health, and (clean) energy’ states Brendan Pearce, FinMark Trust CEO. 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, policy makers, 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’.
For further details please contact:
Candice Borgstein Knowledge and Communications Manager, FinMark Trust