Financial Crime World

Mali’s Banking Industry Regulatory Updates Aim to Boost Financial Inclusion

The banking industry in Mali is set to adopt digital financial services (DFS) to enhance financial inclusion and recovery in the country. The World Bank’s DE4A policy note on DFS and the PAFEEM project highlight the potential for technology to improve inclusive growth.

The Potential of Digital Financial Services

According to the World Bank, DFS played a key role in increasing financial inclusion from 43% to 55% in Sub–Saharan Africa. With DFS, individuals can:

  • Make payments
  • Receive remittances
  • Access savings
  • Credit
  • Insurance
  • Investments

For governments, digital financial services can:

  • Strengthen accountability
  • Improve tracking of funds spent
  • Evaluate impact

Mali’s Financial Sector: Progress and Challenges

Mali’s financial sector is dynamic, with access to financial services increasing from 38% to 44% between 2017 and 2021. Mobile money has seen significant growth, increasing as a share of GDP from 21% in 2015 to 65% in 2021.

  • In 2021, there were 935 mobile money accounts per 1,000 adults.
  • However, there is still a high dependence on cash payments, with only 38% of Malian adults receiving a digital payment in 2021.

The country also has a significant informal sector, with an estimated $450 million worth of remittances passing through it. Additionally, Mali’s gender gaps exist in financial services, with inequalities seen in:

  • Bank account ownership
  • Credit card ownership
  • Digital payments

Only 22% of Malian fintechs are women-headed.

Challenges and Opportunities for DFS Adoption

The government wants to connect its public treasury to the regional switch to scale digitization of government payments. However, challenges remain at the infrastructure, regulatory, and market levels, including:

  • Inefficient interface connections
  • Out-of-date regulations

To accelerate DFS adoption, Mali needs to:

  • Improve financial and digital infrastructure
  • Update the regulatory framework
  • Adapt technology to local habits
  • Introduce DFS across sectors
  • Multiply use-cases

The country is committed to increasing access to financial inclusion through its 2021-2026 National Financial Inclusion strategy and supporting vulnerable populations with social payments delivered through accounts.

Initiatives to Boost Financial Inclusion

The Jigisemeyiri Project distributed cash transfers to 62,000 households suffering from food insecurity during the pandemic. The PAFEEM will accelerate access to transaction accounts for thousands of individuals and micro-small and medium-sized enterprises (MSMEs).

By adopting digital financial services, Mali aims to enhance financial inclusion and recovery in the country. With ongoing efforts to improve infrastructure, regulatory framework, and technology adaptation, the potential for DFS adoption is vast.