Africa Markets

COMESA Institutions, CBC and TDB, Partner for the Validation of the Regional Digital Integrated Common Payment Policy for Micro, Small and Medium-sized Enterprises (MSMEs)

Kigali Rwanda, Wednesday 20th January 2021: “The digital payment system platform dividend for COMESA and Africa at large, can be enormous with potential gains in growth of regional trade (sourcing and supply) which is currently below 20%. But turning this vast potential into reality will require the collective efforts of our governments, the private sector, and development partners,” said Mr. Marday Venkatasamy, Chairman of the COMESA Business Council (CBC), in his opening statement at the COMESA Digital Financial Inclusion High Level Public-Private Dialogue.

CBC in partnership with the Eastern and Southern African Trade and Development Bank (TDB) today convened the
High Level Public-Private Dialogue, a hybrid event, under the theme, “Towards the COMESA Digital Integrated Common Payment Policy for Micro Small and Medium-sized Enterprises (MSMEs).”

CBC has been implementing the Digital Financial Inclusion Program to support the design, development and
deployment of an integrated digital financial services infrastructure that is low-cost, interoperable and fraud resistant, that serves micro, small and medium-sized enterprises, particularly women and youth, at the bottom of the financial pyramid.

The public-private dialogue brought together nine pilot-study countries’ Central Bank Governors; Ministers of Finance; ICT Regulators; manufacturers; Mobile Network Operators; commercial banks; and MSMEs, to consider and validate the COMESA digital integrated common payment policy and framework for SMEs. “The establishment of a digital low-value common payment policy for MSMEs will result in streamlining predominantly cash-based small-scale enterprises into digital economies that enjoy accessible, affordable, interoperable, transparent and real-time cross-border retail payments. This digital financial inclusion drive is expected to boost volumes of cross-border transactions, the formalisation of SMEs and their participation in intra-regional trade,” said Ms. Sandra Uwera, the Chief Executive Officer of CBC.

In alignment, Mr. Admassu Tadesse, president of TDB cited, “financial inclusion involves multiple stakeholders, from policymakers and regulators to private industry, including employers, educational systems, communities and individuals. The responsibility of policymakers and regulators in this context, is to ensure that an open and enabling environment for financial services, from predictable laws and regulations to sound and accessible physical digital infrastructure, is in place while protecting consumers.”

The meeting noted that facilitating and promoting MSMEs’ participation in Digital Financial Inclusion can accrue
benefits such as economic growth, macroeconomic policy effectiveness, and job creation. This was underscored by Hon. Michel Sebera, Permanent Secretary of the Rwanda Ministry of Trade and Industry, who went on to add that, “in order to maximise on the full potential of a digital economy, particularly in this pandemic period, key challenges affecting MSMEs needed to be addressed, such high collateral requirements by formal financial institutions; difficulties in making and receiving payments within the COMESA region; unsecured digital financial services platforms; and many others.”

In agreement, Mr. Robert Bafakulera, Chairman of the Rwanda Private Sector federation noted that addressing the
aforementioned challenges was critical particularly given the prevailing economic conditions due to the pandemic. He stated, “while the COVID-19 pandemic is set to increase use of these services, it has also posed challenges for the growth of the industry’s smaller players like SMEs and highlighted unequal access to digital infrastructure. Several actions will need to be taken to ensure maximum inclusion going forward.”

A key output document that was presented and validated during the public-private dialogue was a Draft Model Policy Regulation Guidelines/Rulebook for a digital integrated regional common payments scheme for SMEs. Moving forward, national committee meetings will precede a second validation meeting of the edited report of the common policy framework.