COVID-19 and Digital Financial Inclusion in Africa : How to Leverage Digital Technologies During the Pandemic
The COVID-19 (coronavirus) pandemic and resulting containment measures are likely to cause an economic contraction of about 2.8 percent in Sub-Saharan Africa (SSA) in 2020 according to the Global Economic Prospects. Among the many adverse effects i...
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| Format: | Brief |
| Language: | English |
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World Bank, Washington, DC
2020
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| Online Access: | http://documents.worldbank.org/curated/en/918121602706504126/COVID-19-and-Digital-Financial-Inclusion-in-Africa-How-to-Leverage-Digital-Technologies-During-the-Pandemic http://hdl.handle.net/10986/34637 |
| Summary: | The COVID-19 (coronavirus) pandemic and
resulting containment measures are likely to cause an
economic contraction of about 2.8 percent in Sub-Saharan
Africa (SSA) in 2020 according to the Global Economic
Prospects. Among the many adverse effects in the global
economy, the crisis is posing a deep threat to financial
inclusion efforts globally. Lockdowns and curfews designed
to curb the spread of the virus resulted in the closure of
bank branches and halted operations of mobile money agents
in compliance with restrictions. Government officials and
health practitioners encouraged use of cashless and
contactless modes of payment to reduce the risk of virus
spread through handling of cash, thus creating new
opportunities for potential adoption of Digital Financial
Services (DFS). Small firms and low-income households can
directly benefit from digital solutions such as mobile money
services, online banking and other financial technology
innovations. Recent evidence suggests that digital financial
inclusion could significantly contribute to economic growth,
reduce poverty and narrow income inequalities without
necessarily causing adverse effects on financial stability
given the appropriate regulatory framework. The brief
focuses on the impact of COVID-19 on financial inclusion and
the potential of robust policy responses. The authors drew
on the Global Findex database to showcase policy options
that harness maximum benefits from digital technology,
promoting financial inclusion and mitigating adverse impacts
during the pandemic and beyond. The poor and vulnerable
groups, such as women, the rural poor and youth, are bearing
the economic brunt of the socioeconomic consequences of the
pandemic. Day laborers and those in the informal sector are
also among the most affected categories of workers. |
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