Since the beginning of the digital age, there have been several advances in the world of digital currency. From mobile banking apps to mining for cryptocurrency, the use of physical bills and coins is becoming less common. The potential of this new technology in developing countries, particularly for those in Africa, cannot be ignored. Here are four ways digital currency in Africa can improve the economy.

4 Ways Digital Currency in Africa Can Improve the Economy

  1. Transferring money is easier and faster when combined with technology. For those who cannot waste time waiting for money to travel from one location to another, digital currency in Africa would allow for conveniently instantaneous transfers. Additionally, more companies are taking notice of the strong potential market for digital currency in Africa and the positive impact it could have on citizens and businesses. Airtel Africa, a telecommunications company serving East, West and Central Africa, has recently partnered with Mukuru, an online remittance company, allowing Mukuru customers to instantly send money transfers directly to Airtel Money customers across 12 African countries. This means that people can make intra-Africa payments from Southern Africa, where Mukuru has a major presence, to other nations in Africa. Users would also benefit from no longer going to an agent to receive international payments physically. Once Airtel Money customers receive the money, they can use it to pay bills, purchase goods and services or even cash out at one of Airtel Africa’s branches or kiosks. This will allow African citizens to get the most out of their money.
  2. Managing personal income leads to greater financial literacy. As the use of digital currency spreads, people are increasingly exposed to the language of business as well as standard banking practices. For those living in countries with low financial literacy rates, this could be the difference between economic stability and poverty. The implications of digital technology in Africa are astronomical due to the previous lack of education on these financial principles across the continent. In Somalia, the current rate of financial literacy is estimated to be 15%. On the other side of the spectrum, Botswana has a rate of over 51%—the highest in all of Africa. With this first-hand knowledge, more people will be able to learn how to manage their finances properly.
  3. Digital currency allows for more connections between African citizens and the rest of the world. The use of digital money transfers not only allows those living in Africa to pay and request money from people within their continent but also those around the world. With the recent partnership between Airtel Africa and Mukuru, small business owners in Africa can now establish business relationships with people in Europe, Asia and the United States, among others. As these relationships continue to grow, the digital currency can flow freely between Africa and the rest of the world, opening the continent up to high-dollar investments from more developed regions and, in time, lead to a potential rise in the African economy.
  4. More women have access to their finances. Only 37% of women in Sub-Saharan Africa have a bank account compared to 48% of men—a gap that has only widened in the past few years. The numbers are worse in North Africa, with around two-thirds of the adult population remaining unbanked and the gender gap for access to financial education standing at an 18% difference, the largest in the world. However, with the rise of digital technology in Africa, more women can become empowered and take control of their finances. Female entrepreneurs rarely apply for loans as a result of low financial literacy, risk aversion and fear of losing their businesses. If these women were to utilize digital banking technology, they would be able to pay employees, investors and, most importantly, themselves more efficiently. As more and more women manage their finances, they will be able to lift themselves out of poverty and strengthen their local economies.

As digital currency in Africa continues to flourish, more entrepreneurs, families and willing investors will be able to witness the rise of the African economy. Money transfers and online banking will likely support the growing economy as it joins the rest of the world in the technology age. With continued global support, African citizens will be able to lift their economy to new heights.

Daniela Canales
Photo: Flickr

Digital Bangladesh on its WayBangladesh has embarked on a journey to digitize itself and transition to a middle-income country by 2021. This goal is known as Digital Bangladesh. Incorporating digital technology in almost every sector of the country is an ambitious target for Bangladesh, yet it has already made progress with more initiatives on the way.

Information and Communication Technology

By 2021, the government aims to integrate Information & Communication Technology (ICT) as a key tool in eradicating poverty and establishing good governance as well as improving the quality of education, healthcare and law enforcement. The government has already laid out some of the foundation work for realizing Digital Bangladesh, such as preparing the National ICT Policy 2009 and the Right to Information Act 2009.

Some of the strategies being used to implement Digital Bangladesh include increasing the coverage of broadband internet connection and cellphone communication throughout the country in order to exchange information and access different types of services, integrating ICT into the school curriculum and improving the capacity and management of healthcare services. Other important areas Digital Bangladesh will improve are increased efficiency in judicial processes, improved coverage of social safety-net programs, reduced environmental impact as well as increased access to banking and financial services.

The Benefits of Digitizing

With more than 120 million cellphone subscribers and 43 million internet subscribers, the population of Bangladesh has been able to enjoy the benefits of digitizing different services around the country. Some examples of these digital services include admission registration to academic institutions, the publication of exam results online, online submission of tax returns, online banking systems and bill payments and filing complaints to police stations. Even video conferencing and telemedicine services are now available in rural areas of the country.

The Access to Information (a2i) Program, supported by UNDP and USAID since 2007, has been the driving force for Digital Bangladesh with the aim of increasing transparency, improving governance and reducing inefficiency in providing public services around the country. On average, six million e-services are provided per month to rural and remote areas through the 407 City Corporation Digital Centers, 321 Municipality Digital Centers and 4,547 Union Digital Centers.

Digitizing is helping to streamline government affairs. More than 25,000 websites of different unions, sub-districts, districts, departments and ministries are connected through the National Web Portal. This portal contains information for more than 43,000 government offices. Furthermore, activities are much more environmentally friendly now that the Prime Minister’s Office as well as around 20 ministries, 4 departments, 64 Deputy Commissioner’s offices and 7 Divisional Commissioner’s offices are using e-filing system. This created an efficient paper-less environment in offices.

Digital Banking

In terms of digital payments, as of December 2015, 18 banks are now operating mobile financial services in Bangladesh. Transactions have risen significantly to 120 percent on average since 2011. This amounts to $1.3 billion on average per month. Although these transactions are a small portion of the entire economy, it is still a notable shift towards digital services, thus a step closer to Digital Bangladesh.

More than one billion transactions in 2015, worth around $20 billion, were done digitally. Furthermore, 70 percent of government payments were also digital. As of 2016, around 38 million people in Bangladesh had utilized mobile money services, reflecting the shift from a cash-dominant economy to a more digital payment economy. The availability of mobile money orders has also been a remarkable stride towards Digital Bangladesh, especially for the rural areas in the country.

Furthermore, around 300 of the Digital Centers have been involved with rural e-Commerce, allowing people to purchase items that are not easily available in remote areas. It has also allowed small-scale women entrepreneurs to participate with 5000 women entrepreneurs who are involved with the e-Commerce platform called “,” which consists of goods produced by these women.

Improvements Still Needed

Bangladesh still has a long way to go in terms of fully digitizing itself. The National Identification System needs to be fully implemented and incorporated with important services in order to improve access to digital financial services. Since human capital is an essential element when it comes to adopting new technology, programs aimed at incorporating ICT-based education from primary to tertiary level schools should be prioritized. Finally, having political stability is a necessity in realizing Digital Bangladesh, given how political turmoil is often a setback when it comes to the development of different sectors in the country, including ICT.

The progress Bangladesh has made so far in realizing its 2021 goal cannot be overlooked despite its lacking in certain areas. However, with the increase in different digital services and activities around the country, Bangladesh is gradually lifting itself up and shifting towards a more ICT based economy, making Digital Bangladesh a potential reality. 

Farihah Tasneem

Photo: Flickr

Credit Access in Fiji
To many people around the world, Fiji and its hundreds of islands are known as a peaceful Pacific vacation getaway. While Fiji certainly profits from its lively tourism industry, life for the more than 900,000 citizens of the island nation is much more complex. Read further to learn more about credit access in Fiji.

Fiji gained independence from the U.K. in 1970 and has gone through intermittent periods of political strife since then. Despite this, Fiji’s natural resources and tourism potential have helped make Fiji become one of the most developed Pacific island nations. Not every Fijian enjoys the benefits of this development, though. Nearly a third of Fiji’s citizens live in poverty. Part of the reason for this high number is the ongoing struggle to achieve credit access in Fiji.

Managing Credit in Fiji

Developed and developing economies alike rely on banking and credit to drive innovation, investments, infrastructure and purchasing power. Fiji’s is no exception.

Fiji’s banking system is overseen by the Reserve Bank of Fiji (RBF). The RBF provides services to the government as well as licenses to the six banks that do business in Fiji. It also regulates how much those banks can dip into their deposits which enables the RBF to maintain the delicate balance between not allowing enough credit and letting it go unchecked.

While the infrastructure for banking exists, credit access in Fiji is simply nonexistent for many citizens. This stifles chances for the country’s economy to grow and for Fijians to lift themselves out of poverty. The government recently started taking steps to address this problem.

Tapping into Fiji’s Wealth

The government is partnering with the Asian Development Bank (ADB) to implement secured transaction reform. Such reforms would allow Fijians to use their non-monetary wealth (such as vehicles, goods or crops) as collateral for loans.

In a country where accessing loans is difficult for many people and businesses, the ability to access non-monetary wealth opens up new avenues for credit access. While these collateral loans could be risky for some individuals, it will increase the lenders’ confidence and help stabilize the growth of the Fijian economy.

Fiji’s Financial Literacy and Innovation

The national government is also taking internal steps to pursue the goal of widespread credit access in Fiji. In 2010, it formed the National Financial Inclusion Taskforce (NFIT). Its purpose is to encourage long-term economic growth and help lift Fijians out of poverty by providing better access to banking.

NFIT has had an uphill climb right from the start. Even after four years of progress, there were still 150,000 unbanked Fijians in 2014 and a full third of Fijians are underserved by banks.

A significant part of NFIT’s efforts have been aimed at improving citizens’ financial literacy. Especially in rural areas, many Fijians lack the basic knowledge they need to engage in the banking system. The same year it was formed, NFIT launched a nationwide campaign to ensure that the broader access to banking achieved would not go to waste. The campaign even has a mascot—a turtle named Vuli the Vonu.

One of the more encouraging developments in the process of spreading credit access has been the rise of digital financial services which Fiji launched in 2010. For the first time, Fijians could digitally bank, pay bills and even transfer money to businesses and families across islands. Digital banking covers 80 percent of Fijians’ financial needs and provides access to financial services even on remote islands where there aren’t any physical banks.

There is room for improvement in Fiji’s credit system, but it’s certainly encouraging to see that steps are already being taken to stimulate growth and provide tens of thousands of poor Fijians with access to banking.

– Josh Henreckson
Photo: Flickr

It has been 15 years since Bill and Melinda Gates started the Gates Foundation, and the couple has made a big bet for the next decade-and-a-half: the lives of people in poor countries will improve faster in the next 15 years than any other time in history.

The Gates’ annual letter was released on Wednesday, Jan. 21, 2015, on the foundation’s blog. The Gates’ are focusing on wiping out diseases, reducing poverty, and improving education. The letter is broken down into four sub-categories of the overall “bet.”

Child Deaths Will Be Cut In Half

The leading cause of death for children under 5 is disease. Unsanitary living conditions and a lack of vaccines kill one in 20 children, and the Gates hope to see a decrease by at least 50 percent by 2030. All countries will add vaccines for pneumonia, diarrhea, malaria and measles to their individual immunization programs. Better sanitation will also contribute to the decrease in disease. In addition to providing vaccinations, the Gates Foundation plans to help mothers adopt new practices, such as proper breastfeeding and skin-to-skin contact with newborns.

Africa Will Be Able to Feed Itself

Although seven out of 10 people in sub-Saharan Africa are farmers, many farms do not yield the benefits of their counterparts in the developed world. Many parts of Africa currently rely on food aid and imports from outside sources to feed their people. Innovations in farming can provide farmers with better fertilizers and a surplus in crops, allowing farmers to farm more food. As technology expands and becomes more easily available, communications with farmers in remote areas will become possible and business will increase. In the next 15 years, Africa will be able to export more than it receives in imports, creating a balanced economy.

Mobile Banking Will Transform Banking

Digital banking can give the poor easy access and control of their assets. Approximately 2.5 billion people don’t have access to cheap and easy financial services, and for many people, their savings is in the form of jewelry or livestock; it is very difficult to cover daily expenses. To be able to use a mobile phone to take care of finances makes it much easier to purchase and save money. Mobile banking is expected to expand and cover a wide range of financial services, such as interest-bearing savings accounts to credit and insurance.

Online Education

Smartphones and software will become more available to African families that can provide more access to education. In remote areas where schools are hours away or students must be of a certain age to attend, it is essential to provide education as early as possible. As more children are exposed to education earlier in life, they are set down a path that leads to success in all areas of life. Online education can be crucial in countries where gender gaps are wide and girls can’t go to school or start a business. Countries that stay behind in education will eventually be left behind.

Alaina Grote

Sources: CNN, NPR, Youtube
Photo: Computer Business Review

digital banking
Cash-based systems for holding money are inefficient and hold a lot of risk, with especially high consequences for the world’s poor. With ‘digital cash’ and saving methods, more people are able to experience financial inclusion in modern banking, suffer less risky consequences and begin investing in their future.

Much of this banking is done through mobile phones, which have become increasingly available to developing countries. About 89 mobile phones exist per 100 people in these areas. Even non-financial institutions, such as small businesses, use mobile payments in order to perform faster business and expand their customer base.

Studies in Mexico have shown that in areas where more banking institutions were introduced, there was a rise in informal small businesses, as well as a seven percent rise in incomes. This demonstrates that greater access to banking systems can lead to economic stimulation.

Having financial transactions performed on mobile phones makes banking services cheaper and more feasible for the poor. Digital banking also comes with better financial records, making it easier for banks and other lending programs to develop credit scores, and lending methods that are tailored to their clients.

With digital banking, immediate transactions can be made from the comfort of one’s home, saving people time and money by avoiding a possibly long commute and day away from work in order to get to a bank. Digital banking also makes money less susceptible to common risks such as thievery, natural disasters, or manipulative friends and relatives.

Some people in these situations even pay others to keep their money safe, adding another unnecessary payment to their expenses.

Long distance transfers also become easier to accomplish. Many households in developing countries receive their income from a family member working in other parts of the country who sends money periodically.

A poll was conducted in 11 sub-Saharan African countries that discovered that 83 percent of those polled had made a payment to someone far away using cash. This involved giving money to bus drivers, asking friends to carry money, or taking time off work to deliver the money themselves.

These processes are not only unsafe, but they can be unreliable and slow.

After a bank was set up in a region in Malawi in 2002, farmers used it to hold their money after the harvest, so that they would be able to continue buying fertilizer throughout the year. Their crop yields grew, therefore increasing overall income, while allowing these farming families to send children to school for even more future investment.

Recently in Kenya, clients of M-Pesa, a mobile money program, were observed and compared to Kenyans without the program. When natural disasters or unexpected events came, M-Pesa clients were able to receive financial assistance from friends and relatives at a much faster rate, making any negative impact much smaller, and allowing their regular lives to be interrupted as little as possible.

The success of M-Pesa has sparked motivation for other countries to create similar programs. Tanzania has over 47 percent of their population using mobile banking, and Uganda has begun the process, and already has 26 percent of their population as a member of a mobile banking system.

Even governments benefit from mobile banking. Since Mexico’s adoption of digital banking in 1997, their government lowered their spending on wages, pensions and social welfare by $1.3 billion, or 3.3 percent annually.

A study was done in India that concluded the government could save $22 billion annually just by digitizing all payments and transfers.

Although digital banking is expanding throughout the developing world, there are still 2.5 billion people without any banking system. Governments, non profits and private groups are now working on making banking more digital, and therefore more accessible to these bank less people.

-Courtney Prentice

Sources: Skoll World Forum, Bill & Melinda Gates Foundation, Forbes, Global Envision, TIME, Foreign Affairs
Photo: Gulf Business