A Stronger Voice and Force to Drive Financial Inclusion Priorities in Malawi and Ethiopia

"In Malawi, our DFS association is leveraging members' expertise to analyze policies and regulations. Once completed, we will engage the government to address the identified gaps. We envision ourselves as a leading force in helping to shape the forthcoming Malawi Digital Economy Strategy and building the digital economy," shared William Kaunda, Chairperson of Malawi's DFS (Digital Financial Services) Association. 

"Ethiopia's Digital Financial Service Providers Association strategy focuses on strengthening our collaboration with regulatory agencies through our mixers, industry showcase events, dialogues, etc. Through these activities, we aim to contribute to shaping the regulatory environment and provide a platform for knowledge sharing and collaboration among stakeholders." Andualem Hailu, Chairperson of Ethiopia's DFS Association, explained. 

Andualem Hailu and William Kaunda shared these insights during a recent webinar discussing the critical role of DFS associations in driving innovation and inclusion in Africa's digital economies. With support from UNCDF's Digital Finance for Resilience (DFS4Resilience) programme, Ethiopia and Malawi's DFS associations are working to increase access to financial services and empower underserved communities. This journey began in 2022 when UNCDF and its partners, the European Union (EU) and the Organization of African, Caribbean and Pacific States (OACPS), convened ecosystem players in the two countries under working groups. 

The working groups in both countries focused on networking, collaboration, lobbying, advocacy, training and boosting capacity to address the fragmented approaches that hindered efforts in the DFS ecosystem. The goal is to contribute meaningfully to national strategies like the Digital Ethiopia 2025 Strategy and the Malawi Digital Economy Strategy by leveraging best practices and impactful interventions. 

In Malawi, the digital financial revolution began in 2011 with the formation of the Mobile Money Coordinating Group. This evolved into the DFS Coordinating Group in 2018 to encompass all digital financial services. In 2018, efforts to become an association faced obstacles but were revived in 2022 with UNCDF's support. This led to the formation of the new DFS Working Group to support digital transformation in Malawi 

In May 2022, UNCDF successfully launched a Working Group in Ethiopia after consulting with stakeholders in the ecosystem who were previously working independently towards similar goals. The working group was formalized by bringing together diverse stakeholders in August 2023. Tigist Bezu, Country Manager for Jamii One, was at the formalization event and expressed optimism about the impact on women's financial inclusion in Ethiopia. 

Some Members of Ethiopia's DFS Working Group at the Association Formalisation Meeting

Pioneering Activities

The activities and achievements of the two working groups leading up to their association formalization have been noteworthy. They have paved the way for innovative solutions that address the unique challenges and opportunities in the respective countries. These initiatives have helped to propel the digital financial services landscape forward. Events like the "Digital Finance Ethiopia Showcase 2022", which brought together industry leaders, policymakers and innovators to share insights, showcase innovations, and learn from each other and similar gatherings in Malawi, provided opportunities for fostering partnerships. 

The working groups also organized industry dialogues, learning missions, training workshops, networking events and knowledge-upskilling activities with UNCDF's technical and logistical support. By leveraging digital technologies, they aim to expand access to financial services and ensure underserved populations are not left behind. Their collective efforts are driving financial inclusion, empowering individuals and communities, and shaping a future where digital financial services are accessible to all.

Transition to Associations

This year, both working groups have attained significant milestones by transitioning into associations and are at the final stages of formalization. This transition, coming on the heels of significant traction and notable success, aims to solidify the impact and ensure the sustainability of these working groups in the ecosystem. As associations (comprising banks, fintech, payment providers, payment issuers and other industry players), the members are not only legalizing their status; they are fostering collaboration to influence policy and regulation, drive innovation and growth, and impact their nations' digital transformation agendas. 

Associations have effectively driven change in the digital financial services ecosystem worldwide. Sarah Corley, CEO of the Alliance for Digital Finance Associations, emphasized this during the webinar, "Working together towards a common goal is key. In our experience, a unified voice and collaborative work are crucial for DFS associations' success. Knowledge sharing, strong partnerships, sustainable funding sources, and implementing capacity building programs contribute to lasting impact in the industry." For Malawi's association, which has joined the Alliance of Digital Financial Associations, the transition signifies a commitment to broader collaboration and access to resources, opening new avenues for growth. 

Malawi DFSWG members pose for a group photo in Blantyre, Malawi after a meeting in August 2023.

Sustaining the Associations

Ethiopia and Malawi's DFS Associations have ambitious plans. As they embrace their new identities as associations, their commitment to financial inclusion remains strong. With a strengthened framework, they aim to engage in constructive dialogues with government bodies, advocate for a comprehensive digital economy strategy, and promote digital and financial literacy through collaborations with the public sector. Through Fintech events, they also aim to prioritize inclusivity for women and other marginalized groups. 

As the associations continue to evolve, ensuring their long-term sustainability becomes paramount. Drawing inspiration from successful associations worldwide and peer learnings, such as the webinar on formalizing associations, the Chairpersons of Malawi and Ethiopia's associations emphasize the importance of fostering strong partnerships, facilitating knowledge sharing and nurturing insights. 

Both associations aim to leverage best practices and explore innovative funding mechanisms to ensure sustainability once UNCDF gradually reduces funding support. These include sponsorship and strategic partnerships for industry events, member dues payment, diversification of funding sources to reduce dependency on a single funding stream, public-private partnerships, and impact investing. 

A Special Focus on Women's Inclusion

Addressing women's inclusion is a priority for both associations. Ethiopia's association has integrated interventions into its strategy to address women's unique challenges in accessing financial services. They aim to drive women's financial inclusion and ensure equal access to opportunities in the country.

Similarly, Malawi has initiated the "She Codes" program to support women in coding. The Chairperson also indicates that member organizations are implementing various programmes to improve inclusivity and women's empowerment in the financial sector.

Sharing lessons and Insights

The transition of Ethiopia and Malawi DFS working groups into associations offers valuable lessons for others in the process of forming associations. These include the importance of networking and collaboration among stakeholders to drive financial inclusion priorities and advocacy for an enabling policy and regulation environment. Additionally, diversifying funding sources through sponsorships and strategic partnerships helps reduce dependency and ensure long-term sustainability, and leveraging best practices and lessons from successful associations promotes innovation and inclusion in digital economies.

Looking Ahead

The journey of Ethiopia and Malawi's DFS Working Groups, now associations, marks a significant step for digital transformation agendas not only in their countries but also in similar ecosystems like Niger and Gabon where the DFS4Resilience programme is convening players. This evolution from working groups to associations exemplifies the power of collaboration, emphasizing that true transformation is achieved when diverse stakeholders come together with a shared vision for the future of digital financial services. With the support of UNCDF and other stakeholders, they are well-positioned to make a lasting impact on financial inclusion and empower underserved communities.