Frequently Asked Questions (FAQs) about ADFI

Q: What is financial inclusion?

A: Financial inclusion is the delivery of useful affordable financial products and services that meet the needs of low-income individuals (i.e. transactions, payments, savings, credit and insurance) in a responsible and sustainable away.

Q: What is digital financial inclusion?

A: Digital financial inclusion is digital access to and use of formal financial services by excluded and underserved populations.

Q: What is the status of financial inclusion in Africa?

A: Although significant progress has been made in Africa, approximately 57% of the adult population have no access to a formal account, be it mobile money or a traditional bank account. Africa is the world leader in adoption of mobile money with 20% of the continent’s adult population having access to a mobile money account compared to the world average of 4.4% (Global Findex 2017).

Q: How will digital financial inclusion contribute to Africa’s development?

A: Digital financial inclusion is a catalyst for equitable development and inclusive economic growth. Its benefits include:

  1. increased investment as individuals and businesses are brought into the formal financial system;
  2. Large efficiency gains in the shift from cash to digital payments and from paper to electronic record keeping;
  3. Productivity gains for governments by reducing leakages in their spending and tax collection;
  4. Digital payments have the potential to unlock new business models in finance and beyond including e-commerce and on demand services;
  5. Improved quality of human capital and economy as more women gain access to financial accounts

Q: What does ADFI stand for?

A: ADFI stands for Africa Digital Financial Inclusion (ADFI) Facility.

Q: How is ADFI structured?

A:  ADFI is structured as a blended finance vehicle composed of a multi-donor special fund with a target envelope of USD 100 million and resourced with grant money from donors and debt funding of up to USD 300 million from the ordinary capital reosurces of the African Development Bank. ADFI currently has committed funding of USD forty (40) million. The multi-donor special fund has an investment horizon of 10 years. 

   

Q: Is ADFI a part of the African Development Bank?

A: Yes, ADFI is an initiative of the African Development Bank in partnership with donors and is housed and managed by the Bank. In a bid to meet its objectives ADFI will also leverage the Bank’s administrative and personnel resources across the continent.

Q: What is ADFI’s objective?

A: ADFI’s objective is to address the systemic barriers to DFS growth and uptake by making strategic and catalytic investments in the DFS ecosystem throughout Africa. It is designed to accelerate digital financial inclusion across Africa, with a goal of ensuring 332 million more Africans, of which 60% are women, have access to the formal economy.

Q: What are ADFI’s areas of intervention?

A: ADFI will intervene along four key pillars aimed at scaling innovative digital financial inclusion and increased integration throughout the continent. This will include infrastructure (e.g.; payment systems development and payment systems interoperability); digital products and innovation (e.g. e-government, digital micro-products e.g insurance, savings, credit); policy and regulatory reforms (diagnostics, strategy development and enhancement, regulatory reform and harmonisation); and capacity building.

Q: Who are the eligible beneficiaries of ADFI?

A: ADFI’s eligible beneficiaries include banks and non-bank financial institutions, mobile network operators, remittance and payment service providers, FinTech companies, government ministries, regulatory bodies and regional economic organizations.

Q: What are ADFI’s fund eligibility criteria?

A: To be eligible for financing, projects must be viable and consistent with ADFI’s objective of addressing the systemic barriers to DFS growth and uptake. Projects will also be chosen based on:

  1.  their expected impact on the livelihood of stakeholders particularly the poor, women and vulnerable communities and population groups.
  2. the potential of benefiting two or more regional member countries and regions as this will strengthen regional integration.

Q: How projects for funding are assessed?

A: Projects are assessed in the following manner:

  1. Preliminary vetting of clients proposals according to agreed criteria by the ADFI coordination team;
  2. Proposals vetted by the ADFI coordination team are then filtered through a Technical Advisory Committee constituted by the African Development Bank
  3. Proposals cleared by the Technical Advisory team are then  submitted to the ADFI Governing Council for guidance and clearance to progress to full project proposals
  4. Detailed project proposals are then developed and approved in accordance with ADFI’s governance structure and applicable thresholds
  5. Formal communication of approval is made to successful applicants
  6. Formal grantee contractual agreements are drawn up and executed by the relevant parties

Q: How long does it take to hear back from ADFI?

A: If everything is in order, it will take an average of one to three months to hear back from ADFI.

Q: How should potential beneficiaries apply for fund?

A: Funding can be accessed by potential applicants by submitting a complete proposal following all criteria for grant eligibility. In addition, applications  funding can be submitted by responding to a published Request for Proposal (RFP).

Q: What are ADFI’s financing features?

A: ADFI key financing features are described in the table below:

Target Fund Size

USD$ 100 Million

Inception Date

01.01.2019

Fund Investment Period

10 years

Special Fund Investment Final Term

15 years

Special Fund Instruments:

Grants and loans (75:25 split)

Special Fund Minimum Grant Amount

USD$ 50,000

Special Fund Maximum Grant Amount

National: USD$ 2.5 Million  Regional: USD$ 5.0 Million

Special Fund Minimum Loan Amount

Overall: USD$ 1 Million

Special Fund Maximum Loan Amount

National: USD$ 2.5 Million  Regional: USD$ 5.0 Million

Special Fund Loan Maximum Tenor:

National: 3 years  Regional: 5 years

Q: Who are ADFI’s partners?

A: ADFI’s key partners include, but are not limited to:

  • The African Development Bank
  • Agence Française de Développement
  • Bill and Melinda Gates Foundation
  • The Government of Luxembourg (Ministry of Finance)
  • Other potential donors

Q: Where can I find more information and data on ADFI?

A: For more information, send your queries to: adfi@afdb.org

Q: Which department at the African Development Bank manages ADFI?

A: ADFI is managed by the Financial Sector Department (PIFD) of the African Development Bank that is head quartered at the Bank’s offices in Abidjan, Cote d’Ivoire.

Q: Who is ADFI’s focal point at the African Development Bank?

A: ADFI’s principal focal point at the African Development Bank is the ADFI Coordinator, Ms. Sheila Okiro.

Q: What are the next steps after the official launch of ADFI?

A:  After the launch, a call for proposals will be published by mid July 2019.

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