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Greater financial inclusion through digitalization has the potential to positively impact Sub-Saharan Africa's economic growth, not only reducing the challenges faced by communities but also leveraging the power of technology to address their unique needs. By empowering communities, consumers, and businesses, we can enable them to thrive and significantly contribute to the economy.
According to the World Bank, economic growth in East Africa is set to increase at a rate of 1.8% in 2023 while West Africa expects growth at 3.3% this year. To achieve this, we must establish a resilient digital payment ecosystem that can support the region's digital transformation.
Digital payments make it easier to do business
Providing businesses with digital payment solutions, financial literacy, and credit access is essential for long-term success. A strong digital payment system is vital, equipping entrepreneurs with the tools and knowledge for secure transactions and business growth.
The recent Mastercard SME Confidence Index indicates that 6 out of 10 SMEs in Africa are confident about business growth in the next year and identified accepting omnichannel digital payments, digitizing business operations, and training and upskilling staff, as the main drivers of growth.
Mastercard's efforts in fostering a digital ecosystem are evident in its partnerships across Sub-Saharan Africa. This can be seen in our partnerships with the likes of Equity Bank where we've signed a 10-year agreement to co-create innovative payment solutions to meet customers' changing needs, or fintech startups like Alerzo where we've partnered to empower businesses by offering digital payment solutions, financial training, and access to credit, ultimately leading to increased sustainability and success in the market.
We've also partnered with telecommunication giants like MTN where we now have a minority stake in its financial technology unit, and governmental entities like Zanzibar's e-Government Agency (eGAZ) where we will provide technical assistance and expertise to support the Zanzibar government's digitization efforts. Each collaboration serves as a brick in constructing a resilient digital foundation. When industry players invest collectively, we create a vibrant digital ecosystem that can attract both international and local investment, fostering infrastructural enhancements, job creation, and propelling economic advancement.
Innovating through digital transformation
Many countries in Africa are embracing digital transformation and this critical step is providing a platform for innovative solutions within the payments space. This in turn opens up a myriad of opportunities for businesses across Sub-Saharan Africa, from implementing new, more efficient business models, to developing additional products and services tailored to the unique needs of their local customers.
Collaboration with Mastercard's banking partners has led to innovative digital payment solutions. For instance, Mastercard and Dashen Bank launched the Dashen Mastercard, a multi-currency prepaid card in both virtual and physical forms, revolutionizing international transactions and travel spending.
Similarly, in partnership with First City Monument Bank (FCMB) and Netplus, we've introduced a contactless payment feature called Tap on Phone. This innovation promises consumers an experience devoid of physical cash, championing convenience, safety, and swift transactions.
It's evident that the continent's reliance on cash payments has its pitfalls. Shifting to digital alternatives presents an opportunity to enhance security and gain valuable insights from data analytics, which can be instrumental in identifying and bridging existing business gaps.
Building inclusive communities through digital solutions
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There's more to digital payments than just transactions. According to the Global Findex report, there are 105 million adults in Sub-Saharan Africa who are unbanked. Digital payments hold the power to usher the unbanked into the realm of the formal economy, offering them an efficient, swift, and secure means to manage their finances. By focusing on community-specific challenges, we can mold a more inclusive society.
Our recent collaboration with Equity Bank Uganda encapsulates this vision. Together, we aim to bridge the digital divide by introducing financial inclusion cards. These tools offer a secure way for individuals to save and spend digitally. Additionally, our Community Pass initiative serves as a functional identity, streamlining access to various services, including credit avenues. With 2.5 million users already onboarded onto Community Pass in Sub-Saharan Africa and plans to register 15 million people in Africa by 2027, this strategy is poised to revolutionize financial inclusion, especially for those residing in remote and often offline regions.
Transforming lives not just economies
The growth of Sub-Saharan Africa's economies would be life-changing for many. It could mean new opportunities for business, more jobs and therefore stronger communities, increased global trade ties, and the uplifting of millions out of poverty. This vision isn't just about economic prosperity; it's about transforming lives. That's why our commitment to fortifying the digital payment ecosystem in this region remains unwavering. Together, we can usher in a brighter future for Sub-Saharan Africa.