Central Bank governor Patrick Njoroge has vouched for an East African online payments platform saying it will deepen cross-border deals via drastically reduced transactional costs.
In an article posted on CBK’s website, entitled,’ Harnessing the Promise of Digital Finance’, Dr Njoroge said increasing linkages between East African Community countries require a trustworthy and foolproof platform that enables traders to deal without fear of fraud.
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“An EAC digital financing ecosystem would expand the market for financial solutions aligned to sustainable development goals, promote regional cooperation and governance. More importantly, it would bring more of our citizens into the financial system, support economic growth and shared prosperity,” he said
This, he added, would increase access to critical social services including education, health, water and sanitation and infrastructure while enabling financial institutions to lend money to businesses based on available financial recorded data collected on a real-time basis without the need for a physical collateral.
“Economies of scale are imperative for digital business models that can be achieved through building regional ecosystems and the East Africa region is a prime candidate for such a system.
“Increasing the market allows the full benefits of digitalisation to be realised.
“This includes building local demand and encouraging widespread adoption of digital financing by users as incumbent financial sector players require deepening of domestic and regional markets,” he said.
As at July, 2020, the total number of mobile money transactions was 157.76 million valued at Sh450.98 billion, compared to 152.98 million transactions valued at Sh366.39 billion the previous year.
CBK, said Dr Njoroge is collaborating with the Monetary Authority of Singapore to learn how to foster a vibrant financial technology sector that stretches across Africa and Asia.
“The EAC is a natural foundation for this initiative and CBK stands ready to work with other policymakers, regulators, private sector players and fintechs in realising this vision of a regional digital finance ecosystem,” he added.