E-Financial
Digital Financial Services And The Need for Global Dialogue
The world is a growing and dynamic place. Despite the obvious challenges, it is generally becoming a richer and more prosperous place to live in with more people being lifted out of poverty than ever before.
For people in low- and middle-income countries, digital financial services (DFS) can be a pathway to move and remain out of poverty.
The commercial benefits are increasingly documented with studies showing that the costs of payment transactions can be reduced up to 90% if they are performed through digital channels.
Digital technology can address one of the main obstacles that have been keeping these services out of reach for so many, the fact that they are too expensive for people whose transactions are worth a fraction of a dollar.
However, despite the growing penetration of mobile devices (including smartphones) and continuous technological innovation, an estimated 2 billion people worldwide still remain unbanked.
While everyone has a frequent need to transact to buy products and services, the ability to access or utilize formal financial services, particularly in developing countries, is undermined by numerous legal, cultural, commercial and financial issues, not to mention in many cases the lack of reliable national ID schemes which makes it extremely difficult for poor people to even open a basic account. There is therefore much more that both the public and the private sectors can do together to exploit the potential DFS can offer to bring the most vulnerable segments of the world’s population into formal financial services.
ITU Facilitating The Discussion
At the macro level there is an urgent need to develop mechanisms to operationalize best practices and policy recommendations to allow regulators, operators and providers in the telecom and financial services sectors supporting the DFS industry to grow organically and reach a larger number of low-income people in a sustainable way.
The ITU, through its Focus Group on DFS and the Global Dialogue, is facilitating a discussion between the telecoms and financial services regulators and operators.
There is a strong need for framed collaboration between the two in addition to a clear understanding of the laws and responsibilities.
What Works?
On the regulatory side, having the right rules in place is key to attract medium and long-term investments, provide legal certainty, avoid arbitrage and allow service providers to scale their business without compromising the security, stability and integrity of the financial system. The telecommunications industry has not been slow to act.
However, in many countries new players find it difficult to navigate an environment which is heavily regulated and where for many years only traditional financial players could operate.
Commercially, there needs to be fair competition to guarantee an open, level playing field for the different stakeholders involved in the process.
A better understanding of how the telecommunications and financial services regulators can work better together in a fast evolving market place is important if any system is to be successful. Examples of effective inter-authority cooperation comes, for instance, from East Africa (i.e. Tanzania, Kenya and Uganda) where regulators have been working hand-in-hand to address issues such as consumer protection, interoperability, security of the network where competences are somehow shared or overlapping.
With mobile numbers suddenly becoming bank accounts, customers are increasingly confused about roles and responsibilities if services are disrupted or where to direct their complaints in case of litigation.
Samples of Success
There are numerous examples of success stories we can draw upon. In 2013, the Mexican government managed, for instance, to save an estimated USD 1.27 billion per year, or 3.3 per cent of its total expenditure, on wages, pensions and social transfers. How? By digitizing and centralizing its payments to all government workers.
Another example is represented by M-KOPA which has provided solar electricity to more than 330 000 homes in three African countries. Each solar home system can be repaid in small daily instalments on their cell phones. Innovations like these that elegantly solve urgent problems will make financial services attractive enough that people are willing to assume the risk of leaving the cash-based economy they know and trust.
Digital credit— small loans that can be accessed instantly over mobile devices—are increasingly offered in low-income countries, particularly in sub-Saharan Africa. One of the first to reach scale in a short period of time is M-Shwari, a savings and loan product launched in Kenya in 2012, and now exported into neighbouring countries.
The product is being used by millions of people, a large percentage of whom are below the poverty line, and thus unserved by credit providers, also because of a lack of credit history.
By using alternative data – airtime, credit top up, number of P2P transfers etc. it is now possible to develop alternative scoring systems that have showed a high level of predictability.
The above examples show how technology is stimulating new applications and innovating business models even though scalability and profitability remain major challenges.
Public-Private Cooperation
No one size suits all. Countries can learn from each other and adapt measures to a national context, but the measures can’t be duplicated without being adapted to local needs.
The Focus Group is providing a toolkit that can be tailored accordingly.
From now to the beginning of January 2017, when our remit will conclude, we will be publishing a series of deliverables which will include a set of recommendations that a broad range of stakeholders can utilize. Our objective is to help accelerate the work being done around the world by local policy and decision makers, influencers and providers of technical assistance on digital financial inclusion.
Sacha Polverini (@sacha279) joined the Bill & Melinda Gates Foundation’s Financial Services for the Poor (FSP) team in December 2012 as Senior Program Officer – Regulation and Policy. A graduate of University L.U.I.S.S Guido Carli in Rome, Sacha holds a Master’s degree in European Political Studies from the Universite’ Libre de Bruxelles. In addition he has completed the post-graduate management program at Solvay Business School, Ecole de Commerce de Solvay, Brussels.
Financial Derivatives Company (FDC) Limited, a premier economic think-tank and financial advisory firm, led by Bismarck Rewane, has reported that Nigerians have accumulated an estimated $59 billion in cryptocurrency holdings.
Bismarck Rewane
According to data released by the firm highlights the country’s emergence as one of Africa’s and the world’s major players in digital assets.
The earlier disclosure reflects a profound shift in Nigeria’s financial landscape.
In Africa’s largest economy, crypto has moved from a fringe activity to a mainstream tool amid persistent inflation and naira volatility.
Citizens and businesses are increasingly turning to dollar-pegged stablecoins and decentralised platforms, building a parallel financial system with significant economic influence.
Nigeria continues to rank among global leaders in adoption.
According to Chainalysis’ 2024 Global Crypto Adoption Index, the country placed second worldwide for grassroots adoption, driven by widespread use in everyday transactions and cross-border commerce.
Despite these impressive statistics, a notable contradiction remains in public perception.
While stocks, real estate, mutual funds, and foreign currency are openly discussed, many Nigerians still approach cryptocurrency with caution, often downplaying their involvement.
Crypto assets, or cryptocurrencies, are digital assets utilizing cryptography, peer-to-peer networking, and distributed ledger technologies (like blockchains) to secure, verify, and record transactions.
Unlike traditional fiat currencies issued by central banks, these assets operate without central intermediaries, functioning globally as alternative stores of value or transactional mediums.
Flutterwave, an African-founded payments technology company, has partnered with Xoom, PayPal’s international digital money transfer service, to enable faster international money transfers into Nigeria.
The partnership connects Xoom’s global money transfer network with Flutterwave’s local payout infrastructure, allowing customers worldwide to send funds directly to Nigerian bank accounts with local settlement in naira.
Under the arrangement, Flutterwave converts Xoom transfers and settles them locally, enabling recipients to receive funds directly into accounts held at Access Bank, United Bank for Africa, Zenith Bank, First Bank of Nigeria, Guaranty Trust Bank and other participating banks.
Nigeria is one of Sub-Saharan Africa’s largest remittance recipients, receiving more than $20 billion in personal remittances in 2024. However, international payments have historically been affected by foreign exchange constraints and settlement delays.
Flutterwave said the partnership aims to address those challenges by combining Xoom’s international reach with its local compliance capabilities and banking partnerships to simplify cross-border money transfers into Nigeria.
Xoom enables consumers to send money, pay bills and top up mobile phones in approximately 160 markets worldwide as part of PayPal’s global payments ecosystem.
“Millions of Nigerians rely on money from abroad to support everyday needs, whether it’s families receiving help from loved ones, freelancers getting paid for their work, or individuals earning income from the global economy,” said Olugbenga Agboola, founder and CEO of Flutterwave.
“This partnership makes it easier and more reliable for people in Nigeria to receive funds and stay connected to opportunities beyond borders.”
The collaboration expands Flutterwave’s cross-border payments infrastructure and strengthens access to international remittance services in one of Africa’s largest payments markets.
The Securities and Exchange Commission (SEC) has unveiled plans to make sustainability reporting mandatory for large public interest entities from 2027 as Nigeria moves to align its corporate disclosure framework with global environmental, social and governance (ESG) reporting standards.
The phased implementation will begin with voluntary adoption by early adopters and large public interest entities before becoming mandatory in 2027. The requirement will extend to other public interest entities in 2028 and small and medium-scale enterprises (SMEs) by 2030.
Dr Emomotimi Agama, Director-General of the SEC, disclosed this at the 2026 Financial Institutions Training Centre (FITC) Sustainability and ESG Conference 3.0 in Lagos, themed ‘Building a Sustainable Africa: Integrating Environmental Stewardship, Social Investment, and Strong Governance for a Prosperous Future’.
Agama said Nigeria’s sustainability disclosure regime is being aligned with the International Sustainability Standards Board (ISSB) framework, including IFRS S1 and IFRS S2, which have emerged as the global benchmark for sustainability reporting.
He said that institutional investors increasingly consider ESG performance a key determinant of capital allocation rather than a peripheral corporate responsibility issue, noting that the price of entry is disclosure.
He said the reforms would strengthen investor confidence and position Nigerian businesses to access global capital markets, where sustainability disclosures are becoming an essential investment requirement.
According to him, Nigeria’s capital market has recorded significant expansion, with market capitalisation growing from about N130 trillion to nearly N160 trillion following recent market reforms, while assets under management have surpassed N9 trillion.
To deepen sustainable finance, Agama said the commission was promoting infrastructure, green and municipal bonds, alongside infrastructure-focused investment funds, to mobilise long-term capital for critical national projects.
He added that the SEC would also encourage investments in the blue economy and support financing for the power sector through green energy bonds, project bonds and public-private investment structures.
The SEC chief cited the recent launch of the Nigerian Exchange (NGX) Impact Board as another milestone in advancing sustainable finance and urged companies, regulators and investors to move beyond commitments by embedding sustainability into governance, operations and investment decisions.
Managing Director and Chief Executive Officer of the Financial Institutions Training Centre (FITC), Dr Chizor Malize, said sustainability and ESG had evolved from compliance issues to core drivers of business competitiveness, investment decisions and economic development.
She said the conference, now in its third edition since 2024, had become a leading platform for advancing sustainability discourse in Africa, adding that this year’s gathering was designed to move stakeholders “from conversation to commitment”.
Chairman of the FITC Advisory Board, Prof Fabian Ajogwu, described governance as the foundation of sustainable development, arguing that Africa must become a standard-setter rather than merely adopting frameworks developed elsewhere.
Although Africa contributes less than four per cent of global greenhouse gas emissions, he said, the continent bears a disproportionate share of climate-related impacts, including worsening floods and increasingly erratic weather patterns.
Ajogwu also cited estimates that poor governance costs Africa between $88 billion and $90 billion annually, while highlighting technology-driven agricultural initiatives, including a partnership involving Morocco’s OCP Group and the Nigeria Sovereign Investment Authority (NSIA), as examples of practical models that should be replicated across the continent.
Delivering the keynote address, Chairman of the MTN Nigeria Foundation, Mosun Belo-Olusoga, said the debate over the relevance of sustainability and ESG had ended, with the real challenge now centred on implementation.
She observed that global investors increasingly evaluate businesses on governance quality, resilience and their ability to manage environmental and social risks, in addition to profitability.
Belo-Olusoga noted that despite contributing the least to global carbon emissions, Africa possesses vast arable land, abundant renewable energy resources and critical minerals required for the global energy transition.
She identified four leadership priorities for the continent: shifting from short-term performance to long-term value creation, replacing corporate philanthropy with strategic social investment, moving beyond regulatory compliance to responsible leadership, and strengthening collaboration among governments, businesses and development partners.
She also outlined five priorities for Africa’s ESG agenda over the next decade, including embedding sustainability into corporate strategy and governance, investing in human capital, mobilising indigenous capital through instruments such as green bonds and pension funds, strengthening institutional accountability, and fostering partnerships in renewable energy, digital technology and climate-smart agriculture.
“The defining challenge before Africa is not a shortage of vision; it is execution,” Belo-Olusoga said, urging governments to create enabling policies, businesses to integrate ESG into enterprise risk management, and financial institutions to develop innovative financing mechanisms that support a green and inclusive economy.
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