LISTEN NOW: Interoperability and its Role in Financial Inclusion


Author: Sarah Corley

This webinar looked fundamentals of interoperability and approaches within Africa with a special focus on Mozambique and Malawi. Panelists for the webinar were Gertrude Kadumbo, Chief Executive Officer at National Switch Limited, Malawi and Joao Gasper, experienced DFS Consultant and Founder of PayTek.

Interoperability is the ability for different systems to connect with one another. In the DFS and Financial inclusion context, CGAP definites it as “The ability for mass market users of DFS accounts to perform specific use case transactions between accounts of different providers.” March 2017, ITU DFS Working Group published a set of 85 recommendations and 28 thematic reports with the aim of accelerating the financial inclusion of more than 2 billion people worldwide. Interoperability and recommendations for implementation are a key part of this report.

It is not the concept of interoperability itself that the user will see, but they will experience benefits such as costs for transactions are simple and affordable (one small cost regardless of the bank/MNO/FSP you are sending to/from), you send/receive money instantly, and you can store value and pay for products digitally. These will increase trust in digital payments from the users, which drives increase in digital transactions. Value-add services, such as savings, credit and insurance can then be offered to users – increasing their financial health and inclusion.

Interoperability is more than just the technology and infrastructure to provide the connections. It also requires collaboration between industry players including commercial banks, MNOs, fintechs, aggregators, microfinance and savings groups. Shared processes, rules and operations need to be agreed and getting these varied players to agree comes with its challenges. It is also getting the business model right so that there a balance between the economic interest of the partners and the end users. The Government and Central Bank also have a key role to play in oversight and ensuring that financial inclusion is part of the remit behind the move towards interoperability.

There are different approaches to and business models for how you can achieve interoperability, and the webinar showcases some of the options available and what countries have implemented. Joao focuses on Mozambique’s journey towards interoperability and Gertrude on Malawi’s journey to implementing a national switch. You can download a copy of Joao’s presentation and Gertrude’s presentation, and you can contact them via email: Joao Gasper and Gertrude Kadumbo