One is not born, but rather becomes, resilient: 
Strengthening inclusive finance to overcome crises 

18 - 22 OCTOBER 2021

For two decades (2000 - 2019), the African economy has been on a growth trajectory that sets it apart it from other continents, despite disparities between countries.

At the same time, inclusive finance has taken off on the continent. In particular, this is due to technology-driven innovations that have contributed significantly towards achieving the United Nations' Sustainable Development Goals (SDGs). 

However, inclusive finance, like other sectors of activity, has also been affected by the severe global challenges we witnessed in recent years, such as climate change, terrorism, security crises, migration, political crises, health crises, etc. Notably, the recent Covid-19 health crisis and the resulting restrictive measures had serious economic and social consequences on the livelihood of vulnerable groups. While the number of cases in Africa remains low compared to other continents, the restrictions had economic and social consequences.

The above-mentioned crises raise questions about the resilience of African countries. However, in particular with regards to the current Covid-19 pandemic, resilience is critical for dealing with the devastating effects of crises. 

To achieve the development challenges set out in the UN's 2030 Agenda, it is necessary to identify how inclusive finance in Africa can strengthen the resilience of populations. Therefore, SAM 2021 is timely, as it will provide stakeholders with an appropriate framework for assessing both the resilience of inclusive finance institutions as well as the sector's contribution to the resilience of populations to shocks.

Resilience of the African inclusive finance sector 

It is common knowledge that when a global shock occurs, poor households are not only the most likely to be affected, but also the least prepared. Due to low savings rates, imperfect credit and insurance markets and inefficient remittance mechanisms, the poor tend to have no financial buffers to cushion their fall. 

Financial products, including savings, credit, digital payments and insurance, can improve resilience in various ways.

Resilient households adopt risk-reducing measures that help mitigate the adverse consequences of shocks. They are thereby better prepared for future economic shocks.

However, there is little research on how to leverage financial inclusion effectively to improve resilience as a policy objective and to use financial tools to help low-income households prepare for and manage unpredictable income flows and expenditure needs. This further reinforces the relevance of resilience as the main theme for SAM 2021.