The Common Market for Eastern and Southern Africa (COMESA) Business Council (CBC) on Tuesday announced the launch of the Digital Financial Inclusion project for SMEs.
COMESA’s project is funded by the Bill and Melinda Gates foundation. A grant of 1.5 million USD (Ksh152.1 million) has been spread across for the year 2019/2020.
The first phase of the project is ongoing in 10 countries in Sub-Saharan Africa and in Africa. It involves a feasibility study which focuses on a clear objective to establish a common system payment policy and facilitate technical support.
“In the end, the payment policy that we are working on will be considered and adopted between bank retailers and will be harmonized. These should be able to address some of the challenges SMEs are facing on financial literacy,” said Mr. Marday Venkatasamy, CBC Chairperson during the launch.
“The project will enhance cross border transactions available for SMEs with a vision of integrating into larger supply chains of bigger companies,” added CBC CEO, Ms. Sandra Uware.
80% of the business community in COMESA is governed by SMEs. A large number rely on cross border trading relationship. The SME sector is largely informal and as a result transact very inefficient and risky cash and cash like methods.
“When SMEs are able to transact digitally they move from an informal to a more understandable business, they become accessible and bankable”, added David Lubinski of Bill and Melinda Gates foundation.
“Traditional methods of trade on hard cash exchange will be cost effectively migrated towards digital solutions and this goes to support efficient and lower risk payments contributing to the financial strength of SMEs”, said Kenya Association of Manufacturers (KAM) Chairperson Sachen Gudka.
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Capacity training and building which enhances value add together with financial support mechanisms is a key area for the project. The project will rely on SME Associations and Business member organizations to implement technical support.
Also present at the launch was KAM CEO Phyllis Wakiaga who reiterated the need to come up with solutions for some of the challenges facing SMEs if players are to wholesomely contribute to the development agenda of the country.
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“As an implementer of this project in Kenya, KAM looks forward to promoting trade for SMEs in the country, added Ms.Wakiaga.
The Digital platform for SMEs goes beyond facilitating affordable and real time transactions for SMEs to include strengthening the visibility and promotion of products and services for the market segment within the COMESA region.
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