Digital financial inclusion is reshaping payments in Côte d’Ivoire
Already a regional standout in terms of growth and investment inflows, Côte d’Ivoire is striving to become a pioneer in digital financial inclusion.
The West African country saw key indices rebound swiftly following the Covid-19 pandemic, with GDP growth reaching 7% in 2021, returning to pre-pandemic levels following a drop to 1.7% in 2020. Growth is set to remain strong, estimated at 6.7% in 2022 and projected to reach 6.2% in 2023, according to the IMF. Coupled with robust investment inflows over the past decade, the country is positioned as the strongest economy in ECOWAS, according to a 2022 report by Lloyds Bank.
To ensure these metrics translate into advancements for the wider population, the government is working to create value-added opportunities in the agriculture sector and expand digital financial inclusion. The percentage of the population with access to either a digital or traditional bank account has grown in recent years, from 41% in 2017 to 51% in 2021, according to the World Bank’s 2021 Global Findex database, thanks to growth in mobile payments and traditional financial institutions.
Between government strategies, international initiatives and innovation in the financial technology (fintech) segment, Côte d’Ivoire is set to increase its banked population and improve citizens’ spending capacity as the economy grows.
Setting sights
To oversee public policy regarding financial inclusion, the country launched the Agency for the Promotion of Financial Inclusion (Agence de Promotion de l’Inclusion Financière, APIF) in 2018. In May the following year the government adopted the National Financial Inclusion Strategy 2019-24. In line with the National Development Plan 2021-25, the strategy identifies five key pillars to expanding financial inclusion: improving access for vulnerable and excluded populations, promoting digital finance, client protection and education, enhanced sector regulations and supervision, and a favourable tax and policy framework.
The government aims to reach 60% financial inclusion and digitalise some 80% of its services by 2024. In 2021 the World Bank conducted a study assessing the fintech and digital financial services landscape in Côte d’Ivoire, identifying 37 initiatives that could be supported through increased funding, digital skills and a clearer operating environment. In response, the government developed a 2022-24 roadmap to improve the segment and foster the next generation of industry leaders. Additionally, the APIF has organised stakeholder workshops and innovation forums to boost fintech companies’ access to markets and finance.
Private players
Alongside government initiatives, the expansion of digital payment solutions is helping to increase digital financial inclusion in Côte d’Ivoire and sub-Saharan Africa as a whole.
In recent years non-bank financial institutions have been primarily responsible for improving access to financial services in the region. Some 36.7bn mobile money transactions took place across the continent in 2021.
Wave Mobile Money, a Senegal-based start-up, has grown particularly popular in Côte d’Ivoire by leveraging low fees and QR code technology. In July 2022 the International Finance Corporation invested €90m in the start-up to help spur financial inclusion and economic growth in both francophone
West African nations
Founded in 2020, Djamo is a local fintech start-up with an estimated 200,000 customers and backing from US-based incubator Y Combinator. The company provides customers with an access card for online transactions, savings and investment options, as well as education to improve financial literacy via a digital platform.
Another Ivorian start-up, Green Pay, works with UEMOA’s Electronic Money Interbank Group to provide electronic payment terminals to 140 banks in the region.
Increasing Access
The gender gap in account access remains significant in Côte d’Ivoire, with women 27 percentage points less likely than men to have access to a bank or digital account in 2021. The disparity between urban and rural populations is another obstacle to financial inclusion, with the account ownership rate 12 percentage points higher in cities than in rural areas.
Connectivity and digitalisation play a central role in expanding financial inclusion, with internet penetration having more than tripled from 21% in 2015 to 73% in 2020. In Côte d’Ivoire, some 72% of unbanked adults have a mobile phone, pointing to the potential to reach unbanked populations through fintech or mobile payment platforms – a model that has been successfully pioneered in other African markets, most notably Kenya.
Given the widespread use of mobile money accounts, most account holders primarily use mobile phones or the internet to make payments; the use of debit or credit cards is virtually non-existent.
Looking ahead, a key hurdle to financial inclusion is the reliable identification of individuals and the formalisation of micro-, small and medium-sized enterprises, as a lack of proper documentation can prevent both people and businesses from accessing financial services. Despite high levels of intra-block mobility, an estimated 196m people within ECOWAS lack a form of collective legal identity.
There has been recent progress on this front, however. ECOWAS countries are in the process of fast-tracking the World Bank-supported West Africa Unique Identification for Regional Integration and Inclusion programme, which would bolster regional integration, financial inclusion and access to services by providing the population of member states with unique digital identification. A pilot phase of the $395m project is already under way in Côte d’Ivoire.