Elsie Addo Awadzi, the Second Deputy Governor of the Bank of Ghana, has expressed concern over the ongoing challenge of financial inclusion in Africa.

Despite notable strides in expanding access to financial services, a substantial portion of the population remains excluded or underserved.

Referencing the World Bank’s 2021 Global Findex report, Ms. Awadzi highlighted that 76 percent of the global adult population had access to a bank account or mobile money in 2021, a significant increase from 51 percent in 2011. However, approximately 1.4 billion adults worldwide still lacked access to these financial services.

“The excluded groups largely comprise unemployed persons, low-income earners, rural dwellers, women, youth, persons with disabilities, and those displaced by natural disasters, climate change, war, and conflict,” Ms. Awadzi emphasized. These demographics remain particularly vulnerable to financial exclusion, despite overall progress.

Ms. Awadzi pointed out the persistent and widening gender gap in financial access, especially in sub-Saharan Africa. The gap between men and women’s access to financial services increased from 7 percentage points in 2011 to 12 percent in 2021, contrary to the global trend of a narrowing gap. She noted that women in sub-Saharan Africa were less likely than men to raise emergency funds during a crisis, often relying on friends and family, which is not always dependable.

While mobile money has played a crucial role in extending financial access to underserved groups, Ms. Awadzi underscored the need to enhance its usage beyond simple payment transactions. “A lot of the access we’re seeing through mobile money is sometimes short-lived, as people often cash out their mobile money immediately after receiving payments or remittances,” she explained.

Ms. Awadzi emphasized the critical need to mainstream financial inclusion into policy, regulation, and business models, rather than relegating it to the periphery of economic planning. “We need to consistently make sure that this is mainstreamed into policy and regulation and in business models of financial services providers and payment services providers as well,” she urged

Broader Economic Implications of Financial Exclusion

Ms. Awadzi highlighted the broader economic implications of financial exclusion, noting that it hinders the effectiveness of monetary policy, limits government revenue, and leaves certain economic actors vulnerable to economic shocks.

“Exclusion, in the long run, does not augur well for the long-term viability and resilience of financial institutions,” she cautioned. She added that financial institutions should see the unserved and underserved segments as potential future clients to be nurtured.

To address these challenges, Ms. Awadzi called for coordinated efforts to steer innovation and investment towards promoting sustainable financial inclusion. She emphasized the need for clear and consistent policies, effective regulation, and investments in critical infrastructure such as digital IDs, interoperable payment systems, and credit reporting mechanisms.

“It’s important that we balance the policy objectives of inclusion, promoting innovation to promote inclusion, but at the same time, making sure that the financial systems are stable, have integrity, and provide real access at transparent pricing for the ordinary person and the underserved and unserved.”
Elsie Addo Awadzi

Moreover, Ms. Awadzi stressed the importance of measuring the real impact of financial inclusion initiatives. She pointed out that the success of such initiatives should not be judged merely by the number of accounts opened, but by the extent to which the underserved and unserved genuinely benefit and can unleash their full economic potential.

Ms. Awadzi’s address serves as a call to action for all stakeholders involved to adopt a more inclusive approach that integrates financial inclusion into the very fabric of financial policy and business strategy. This, she argues, is essential for fostering a resilient and inclusive financial ecosystem that benefits all segments of society.