NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

By Mario Egie and Aly Madhavji

Africa is the home to 1.2 billion people and what has been described as the world’s largest trade area — the African Continental Free Trade Area. Africa is forging a new path to driving development, and access to financial services will play a significant role in its economic growth. The need to provide improved systems for poverty reduction, if not alleviation, is further accentuated when one considers that 416 million Africans live in extreme poverty, and access to financial services is right at the heart of the solution.

In a review of the impact of financial inclusion on economic growth, the World Bank argues that “such services must be provided responsibly and safely to the consumer, and sustainably to the provider.” Construed appropriately, financial inclusion has the potential to reduce poverty and inequality by helping disadvantaged groups to benefit from opportunities that otherwise would not have been available.

Photo courtesy of Simon Berry.