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Mali’s Financial Institutions Take Steps to Enhance Security Measures and Boost Financial Inclusion

In a bid to enhance financial inclusion and security, Mali’s financial institutions are taking steps to leverage technology and promote access to financial services.

Digital Financial Services: A Key Driver of Financial Inclusion

According to the World Bank, digital financial services (DFS) have played a key role in increasing financial inclusion from 43% to 55% in Sub-Saharan Africa. DFS has been instrumental in expanding access to financial services, with mobile money accounting for 65% of Mali’s GDP.

Progress Made, But Challenges Remain

Mali has made significant progress in expanding access to financial services, with the percentage of adults having an account increasing from 38% to 44% between 2017 and 2021. However, despite these gains, there are still significant challenges facing the country’s financial sector.

Gender Gaps and Infrastructure Challenges

Gender gaps exist in bank account ownership, credit card ownership, and digital payments, with only 18% of women owning a bank account compared to 26% of men. Additionally, infrastructure and regulatory challenges remain major hurdles, including inefficiencies in connecting the Public Treasury to the regional switch, outdated payment systems, and limited credit infrastructure.

Addressing the Challenges

To address these issues, Mali’s government is working with the World Bank to develop a national financial inclusion strategy for 2021-2026. The strategy aims to increase access to financial services, particularly among vulnerable populations.

Several initiatives are being implemented to achieve this goal:

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

Accelerating the Adoption of Digital Financial Services

To accelerate the adoption of digital financial services, Mali is advised to:

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

Increasing Access to Financial Inclusion

The government has also committed to increasing access to financial inclusion through social payments delivered through an account. This initiative aims to support vulnerable populations, including those affected by the pandemic.

Challenges Remain

Despite these efforts, challenges remain, including:

  • High costs associated with DFS adoption
  • Low literacy rates
  • A lack of recourse mechanisms for addressing consumers’ financial complaints

Conclusion

In conclusion, Mali’s financial institutions are taking steps to enhance security measures and boost financial inclusion. However, significant challenges remain, and it is crucial that the government and private sector work together to address these issues and promote access to financial services for all.