Central Bank governor Patrick Njoroge has vouched for an East
African online payments platform saying it will deepen cross-border
deals via drastically reduced transactional costs.
In
an article posted on CBK’s website, entitled,’ Harnessing the Promise of
Digital Finance’, Dr Njoroge said increasing linkages between East
African Community countries require a trustworthy and foolproof platform
that enables traders to deal without fear of fraud.
“An
EAC digital financing ecosystem would expand the market for financial
solutions aligned to sustainable development goals, promote regional
cooperation and governance. More importantly, it would bring more of our
citizens into the financial system, support economic growth and shared
prosperity,” he said
This, he added, would increase
access to critical social services including education, health, water
and sanitation and infrastructure while enabling financial institutions
to lend money to businesses based on available financial recorded data
collected on a real-time basis without the need for a physical
collateral.
“Economies of scale are imperative for
digital business models that can be achieved through building regional
ecosystems and the East Africa region is a prime candidate for such a
system.
“Increasing the market allows the full benefits of digitalisation to be realised.
“This
includes building local demand and encouraging widespread adoption of
digital financing by users as incumbent financial sector players require
deepening of domestic and regional markets,” he said.
As
at July, 2020, the total number of mobile money transactions was 157.76
million valued at Sh450.98 billion, compared to 152.98 million
transactions valued at Sh366.39 billion the previous year.
CBK,
said Dr Njoroge is collaborating with the Monetary Authority of
Singapore to learn how to foster a vibrant financial technology sector
that stretches across Africa and Asia.
“The EAC is a
natural foundation for this initiative and CBK stands ready to work with
other policymakers, regulators, private sector players and fintechs in
realising this vision of a regional digital finance ecosystem,” he
added.
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