Celebrating 10 years of FSD Africa | The Emergence of the Digital Finance Profession

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Author: Tariro Nyimo

An Introduction to Digital Frontiers Institute

As Digital Frontiers celebrates its eighth year of operation along with FSD Africa celebrating their 10th anniversary, we reflect and celebrate the key partnerships that have contributed to the success and impact of its school, Digital Frontiers Institute (DFI) and its Alumni. FSD Africa is a key partnership that has significantly contributed to DFI’s success. Since 2015, FSD Africa has co-funded DFI’s efforts to train and support digital finance professionals across the globe. As a result, DFI has trained over 20,000 professionals from 168 countries, providing around 830,000 instructional hours of teaching.

DFI has also established 38 in-country communities of practice (COP) working groups, bringing together professionals to apply the skills they have learned to their country’s context. This has resulted in increased capacity in inclusive finance, collaboration and strengthening of digital financial services and products, policies and regulations across various countries.

The FSD Africa Partnership

In 2015,  Digital Frontiers Institute (DFI) identified a need to build capabilities in digital-financial-service (DFS) professionals, with the view to bridge capacity gaps that exist, especially in developing markets.  – with a strong emphasis on sub-Saharan Africa (SSA); and thereby accelerating financial inclusion. DFI’s strategy focuses on providing avenues for ongoing professional development through two primary activities: i) training and ii) facilitating a network of professionals.

Between 2016 and 2017, FSD Africa, together with the Omidyar Network, Bill & Melinda Gates Foundation, and the MasterCard Foundation co-funded DFI to first demonstrate market demand, a business model, price points, affordability, segmentation, a route to sustainability and the capacity to establish a robust, competent and capable independent institute.

In 2018, as a result of the success of this pilot phase, FSD Africa provided a grant to support the scale-up of DFI’s 5-year plan, which has exceeded expectations. As of December 2022, the Certified Digital Finance Practitioner (CDFP) programme’s reach on the African continent, includes training 9 864 participants (over 4 500 unique professionals) with a pass rate of 86% and establishing 20 in-country African COPs.

The partnership between DFI and FSD Africa has also contributed to the development of a new course, Inclusive Digital Economy Development (IDED), which was piloted with 105 FSD Network staff and partners. According to the OECD, the Digital Economy is:

“The Digital Economy incorporates all economic activity reliant on, or significantly enhanced by the use of digital inputs, including digital technologies, digital infrastructure, digital services and data. It refers to all producers and consumers, including government, that are utilising these digital inputs in their economic activities”.

The IDED course is designed for professionals in developing economies who want to advance their skills and knowledge to have a greater positive impact. Specifically, in the context of the digital economy. In 2022, FSD Africa provided an additional scholarship fund for selected DFI courses (including IDED) which was distributed to 190 professionals in countries where FSD Africa sought to strengthen digital finance capacity to support the growth of local digital economies as detailed in Table 1 below. Through this scholarship 146 private, 36 public and 8 development sector candidates received training.

 

 

Only 22% of the candidates for the scholarship fund identified as female, whilst 77% identified as male. Women continue to be under-represented in the digital finance profession and DFI’s Gender Equality Change-makers programme challenges equity within African organisations and mobilises change-makers to implement gender action plans in their organisations. DFI’s CDFP programme currently has 33% of participants who identify as female.

The FSD Africa and DFI partnership has produced significant positive results for Africa in terms of individual and institutional capacity strengthening of regulators and digital finance providers, and increased cross-sector collaboration resulting in new country-based initiatives on policy, products, customer needs, and inclusion

 

The Ethiopia Story

DFI has a long history of capacity building in Ethiopia. To date, DFI has trained over 600 unique professionals. DFI also has a well-established community of practice, which has resulted in the formation of the Association of Ethiopian Digital Finance Practitioners in November 2021. Through both initiatives participants work together to practically champion a shared passion for building fluency in digital finance and inclusion. Seeing locally-led digital development in action is both rewarding and necessary, and a strong, competitive, and inclusive financial market is essential to sustained development.

DFI and FSD Africa supported Ethiopia’s financial inclusion initiatives such as the National Bank of Ethiopia (NBE) 2020 launch of a new digital financial services framework aimed at promoting the development and use of digital financial services. Additional scholarships for exceptional Ethiopian digital finance professionals (including NBE staff) to join the CDFP journey were distributed in 2022, and 22 professionals from the Ethiopia National ID Programme were awarded scholarships for the Digital Identity course from the Bill and Melinda Gates Foundation. The FSD Network also launched FSD Ethiopia in May 2022. According to the World Bank’s Global Findex database, in 2017, only 22% of adults in Ethiopia had a bank account, compared to a global average of 69%. More work is needed to ensure progress towards Financial Inclusion in Ethiopia.

 

Emerging CDFP candidates in Sudan

In 2022, six exceptional candidates from Sudan received a full CDFP scholarship. To date, Manal Yassin is the only CDFP graduate from Sudan. She is the Community of Practice Facilitator and founder of the Shomul Association of Digital Finance Practitioners. With 50% of the CDFP scholarships going to Sudanese candidates, the level of excellence and potential in Sudan is evident.

Overall, I owe FSD Africa my success with CDFP and the benefits I realized because without their support I couldn’t join the CIDM or CDFP and realize all these benefits.

Manal goes further and shares how the DFI programmes have benefited her in her professional career, she reported that:

The value that CIDM and CDFP can bring to people’s careers in a country like Sudan is big. We have been isolated for different reasons and the currently provided services are a bit old-fashioned. We need new ideas, for me what CIDM and CDFP have provided is to equip me with those new ideas and experiences with other markets…those courses are very much valuable and can make a difference really in countries like Sudan.

 

Extending DFI’s Reach

Overall, the inclusive finance profession has been strengthened in priority countries as a result of the increased number of participants in DFI courses in the last two years. In total, 908 unique students from the six priority countries (Ethiopia, Ghana, Kenya, Nigeria, Somalia, and Sudan) enrolled in 2 095 DFI courses between 2021 and 2022.  Of the total unique students, 36% were female, 61% were male, and 3% reported as either non-binary or preferred not to disclose their gender identity. The average pass rate of students from the priority countries during this period was 86% with an attrition rate of 33%.

Of the students awarded the FSD Africa scholarship, Sudan and Somalia had the highest percentage change in total enrolments, increasing by 50% and 68% respectively between 2021 and 2022. Figure 1 below depicts the variation in participants between 2021 and 2022 across the prioritised countries.

The intervention of the 2022 scholarship fund increased the number of inclusive finance professionals and CDFP graduates in these sub-Saharan countries. In these countries, CDFP graduates are already championing digital financial services that better serve those most in need. Abenna Addai, a Ghanian development practitioner who completed her CDFP journey in 2021, highlighted how the CDFP journey helped improve her knowledge and skills.

‘Of course, it [CDFP journey] gave me a better qualification. So, I can actually speak up and say, okay, I, I really know something about digitalisation and I mean some of the things I already knew in the course, but it gave me a better understanding of how to structure my knowledge. It did help me in not only structuring my knowledge, but it helps in structuring, for example, reports when you’re reporting on a certain area.’

 

Moving towards an Inclusive Digital Economic Development (IDED)

DFI developed and delivered a four-week introductory course called the Inclusive Digital Economic Development course (IDED) which was offered in cohorts using asynchronous and synchronous learning techniques. The IDED course is intended for professionals in developing economies who want to improve their skills and knowledge to advance their careers. The course incorporates the idea that the digital economy is complex, and the links between actions and consequences are not entirely predictable; however, strategy and policy can be evidence based.

The FSD Africa IDED scholarship was set to have a minimum of 40 scholarship students per cohort, this target was exceeded as shown in the graph below for the 2 cohorts per annum.

The IDED participants were mainly from the private sector, accounting for 74% of the students, with the public sector accounting for 14% and the development sector accounting for 12%. An average of 68% across both IDED cohorts were participants from Financial Service Providers. The public sector’s response was noticeably lower. In addition, 52% of the FSD Africa scholarship recipients were female, while 48% were male.

 

The Alliance of Digital Finance Associations

The Alliance of Digital Finance Associations (The Alliance) was founded in September 2021 to unite the global digital finance community through its demonstrable global convening power to reach approximately 20,000 digital finance professionals across 80+ countries, with a focus on Africa and Asia. The launch of a Digital Finance Association (DFA) Accelerator Program in 2023 will allow DFAs to form and make an impact, as well as support existing DFA members, grow their membership and hold a series of events and working groups to amplify the profession’s voice.

The Alliance is currently being incubated at Digital Frontiers. FSD Africa supported the COP activity and formation, and this support was crucial in bringing the digital finance community together and creating the movement that led to the formation of DFAs and then The Alliance. This relationship remains important, with many country-based DFAs maintaining close ties with local FSD offices. FSD Mozambique, for example, has worked jointly with the Mozambique Fintech Association (a DFA member of The Alliance) to produce Fintech Reports and host Fintech Weeks. The Alliance Board also had room for external, non-DFA membership positions, and Digital Frontiers is delighted to have Juliet Munro, Director of Digital Economy at FSD Africa in one of those positions.

 

Conclusion

Through this partnership, both FSD Africa and DFI have been able to increase capacity for Financial Inclusion in Fragile Communities and States (FCAS) that are still heavily reliant on traditional banking, resulting in higher levels of exclusion among the most vulnerable. DFI’s partnership with FSD Africa has contributed to improved digital finance policies, regulations, and directives, as well as increased cross-sector collaboration networks facilitated by platforms of continuous professional development.