Business Model to Promote Digital Financial Inclusion Plan Developed

A business model on operation and implementation of a regional online payment platform for Micro and Small Medium Enterprises (MSMEs) in the COMESA region has been developed.

The model was created by the COMESA Business Council (CBC) as part of its digital financial inclusion plan for MSMEs. It is aimed at supporting the design, development and deployment of an integrated digital financial services infrastructure that is low-cost, interoperable, real time and fraud resistant. It is intended to serve (MSMEs) and the customers they transact with at the bottom of the financial pyramid.

The model was validated during the 4th Digital Financial Inclusion Public-Private Dialogue conducted by the CBC on 10th March 2022. Close to 200 delegates attended the dialogue physically in Lusaka, Zambia and virtually.

CBC had engaged a consultant to conduct the study on the business model design as well as the progress made so far in driving this regional agenda in the Member States.

According to the experts, MSMEs contribute an estimated 50% to 70% of the Gross Domestic Product (GDP) in COMESA and account for 50% to 60% of the employment opportunities in the region.

The key drivers of financial inclusion in the region have been mobile money and agent banking, now reaching millions of previously unbanked individuals, households and SMEs offering affordable, instant, reliable services on payments, savings, credit and insurance services among others.

Addressing the delegates, COMESA’s Assistant Secretary General for Programmes, Dr Kipyego Cheluget appreciated the progress made towards broader financial inclusion in the region:

“However, there is still some key challenges namely low financial literacy in most COMESA member countries, high cost of services, regulation not keeping pace with innovation and weak consumer protection,” he noted.

Kenya was recognized for having the largest and most successful mobile money sector in the region and has consistently led in the scale and innovation.

Speaking at the same event, CBC Board President, Mr Marday Venkatasamy said financial inclusion is not only about facilitating access to formal financial systems but also about digital literacy skills.

“It is apparent therefore, that the private sector undisputedly has a pivotal role in driving the sustainable development agenda in the region,” Mr Venkatasamy added.

Other keynote speakers at the event included Bank of Zambia Governor, Dr Denny Kalyalya who was represented by his deputy Dr Francis Chipimo.

At the same time, the CBC Digital Financial Inclusion Recognition Awards for the Industry were launched. The following companies were recognized for their commitment and contribution to the digital financial inclusion plan for MSMEs in the COMESA region: Vodacom, Techno Brain Group, Rwanda Information Society Authority (RISA), Kenya Bankers of Association, KCB Bank, COMESA Clearing House, Coca-Cola East and Central Africa Franchise, Bayer, Bankers Association of Zambia, Bank of Zambia and Airtel Africa.