Finance for Impact was in the Democratic Republic of Congo (DRC) last week. We had an interesting mission there, working in the areas of financial inclusion and digitalization of payment streams for the World Bank. Here are some highlights on financial inclusion in the DRC.
Financial inclusion, which refers to initiatives making formal financial services available, accessible and affordable to all segments of the population, is one of main building blocks of inclusive growth in the DRC. Indeed, for a country covering 2.3 million Km2 (more than 4 times the size of France), with a population of about 80 million, it is important to provide fair access to financial services to everyone, in particular in the remote areas, e.g. the provinces of Haut Katanga, North and South Kivu, Lualaba, and Ituri. Moreover, the country is emerging from decades of conflict, with infrastructure severely damaged and major difficulties to navigate through a complex topography.
Poverty in the DRC is widespread with an average monthly income of about USD85 (and 53% of the population is earning less than USD3.30 per day). The average salary of a civil servant is USD96 per month (Some 1.1 million civil servants are on payroll of the national government). The DRC has an historical low take-up of financial services. For instance, the majority of the 40 million adults in the DRC (including the 19 million deep rural adults) do not have easy access to financial services; only 1.1 million adults use more than one type of formal financial services (more than 25 million adults are excluded from the financial system).
Progress is being made in the DRC. First, a comprehensive and ambitious DRC Financial Inclusion Roadmap 2016-2021 has been recently proposed in the country. This roadmap lays out the national priorities for the enhancement of financial inclusion. The Roadmap is based on the diagnostic findings contained in the DRC Making Access Possible (MAP): Financial Inclusion Diagnostic Report 2016, which in turn draws on in-country research and interviews, FinScope Survey 2015 and qualitative research (The MAP has been conducted in conjunction with the Ministry of Finance).
Second, payment streams are being structured and digitalized. For instance, the large bulk of civil servant salaries are paid through bank intermediation today. In DRC, there are about 1.1 million civil servants and 72% of them have been granted access to a bank account and facilities for payment of their monthly salary (The remaining 28% are usually live in remote areas and, therefore, are more difficult to reach. Still payment can still be made through various networks, e.g. Caritas).
In addition, an upgrade of the national payment system and related regulation are currently being developed to address interoperability, encourage payment partnerships, and allow better access to payment systems and telecoms infrastructure. Also mobile money operators are developing capacity in the country, e.g. The number of Vodacom M-Pesa agents increased from 3,000 in 2013 to close to 30,000 today, thus covering a much larger territory.
Finance for Impact is delighted to provide support in the area of financial inclusion and we look forward to further contributing in the future.