In a bid to leverage on data and commercial intelligence to benefit the masses of Micro, Small and Medium Enterprises (MSMEs) the African Union has launched the African Smart Finance and Digital Banking Initiative.
The fresh initiative is expected to support the African SMEs, women and youth to realize financial self-sustainability, build market and investor confidence, and ultimately accelerate the continent’s economic growth.
The Digital innovation has been created to deliver loans to millions of people in different countries at low interest, accelerated cycle of service delivery such as the reduction of loan cycle from 3 months to 3 days, and a reduction of risk due to the affordability of cost of finance. The multiplier factor will be a key lever to uplift Africans out of poverty and expand investments opportunities.
The initiative was launched by the African Union, Department of Economic Development, Trade, Industry and Mining in collaboration with the AeTrade Group on the margins of the African Union Summit.
Hailemariam Desalegn, the Former Prime Minister of Ethiopia, and Chairman of the AE Trade Group noted that the initiative had adopted the fourth industrial revolution concept of an inclusive approach working closely with public and private sector partners including Development Finance Institutions in Africa to establish a job creation machine to lift millions of people out of poverty., “At this launch, we are turning a new chapter where we embrace the use of technology to build our economy as Africans from the ground up, ensuring that we leave nobody behind. We have a youthful continent, wherein by 2030 it estimated that Africa’s youth shall reach 1.6 billion people. Indeed, job creation is a top priority for each and every leader and we are working towards the goal of creating 80-125 million jobs in the next 15 years”.
The launch of the African Smart Finance and Digital Banking Initiative calls for a shift in the mindsets of SMEs, bankers, development finance institutions, angel investors, and the venture capital players, in a strategy that supports a high tolerance for risk with a huge appetite for patient capital which allows SMEs to venture into profitable business enterprises, according to a statement issued by the African Union.
(MSMEs constitute over 90% of total business units in Africa. They are often described as efficient and prolific job creators, the seeds of big businesses and the fuel of national economic engines. Even in developed industrial economies, SMEs, rather than the multinationals, provide the largest amount of employment. For Africa to become a meaningful and proportionate shareholder of the global digital economy, it needs to leverage on data and commercial intelligence to benefit the masses of MSMEs, young startups, youth and women.