Payments and Infrastructure

About Payments and Infrastructure

CGAP’s focus on financial infrastructure includes country or regional payment systems, private and public credit bureaus, and financial reporting standards and policies tied to financial transparency. Government agencies, private sector actors, bank and MFI professional associations, and financial service providers all play a vital role in developing and ensuring the quality of financial infrastructure.

As a whole, Sub-Saharan Africa’s payment systems are the least developed globally. Cash dominates the payment system in most countries and inter-bank domestic transactions within the capital city can take up to 45 days in some extreme cases. Over the last three years, however, 33 countries have started, and in some cases fully completed, modernization of their payment systems, including putting in place automatic clearing houses (ACH) and real time gross settlement (RTGS) systems. Once in place, these improvements enhance the speed and lower the cost of financial transactions.

As in Europe and North America, large banks dominate and control access to payment systems. Transforming MFIs have found that a commercial bank license does not guarantee access to national payment systems. Some central banks are beginning to develop special platforms for smaller banks to access national payment systems and, in some countries, MFIs have made special arrangements with apex bodies or commercial banks to gain access to the national payment system.

Regional integration initiatives, such as the Southern African Development Community (14 countries in Southern Africa), the Economic Community of Central African States (six countries in Central Africa) and the West African Economic and Monetary Union (eight countries in West Africa), are additional driving forces for the modernization and the integration of payments and settlement systems.

Africa also has the least developed credit bureaus globally, and there are several hurdles. Many countries have weak national ID systems, and efforts are underway to reform ID systems to create single identifiers for each person. Privacy laws in many countries prohibit the development of private credit bureaus and restrict information sharing by public credit bureaus. Other barriers include weak reporting capacities in MFIs and reluctance and inexperience in sharing data with credit bureaus.

There is a growing international recognition of the importance of accounting and auditing standards in many African countries. However, national accounting bodies have varying levels of capacity across the region, and there is a critical shortage of qualified accountants in most countries. As of 2007, fifteen countries have fully adopted international financial reporting standards (IFRS). Two regional accounting organizations (ECSAFA and FIDEF) are championing the harmonization and improvement of standards. However, compliance with standards remains an issue of central concern both at the corporate level and at the MFI level.

Strengthening Industry Infrastructure

As part of CGAP’s global work on transparency and financial infrastructure, CGAP supports retail-level providers and promotes higher standards of performance. Our activities include:

  • Ongoing engagement with training providers to provide CGAP courses for MFIs and with MFI networks to distribute publications
  • Surveying the development of payment systems, credit bureaus, and accounting and auditing standards in Africa
  • Facilitating audit seminars to improve regional and national auditing standards for MFIs
  • Promoting transparency
  • Promoting the development and use of new banking technologies and payment systems that serve the poor


25 September 2017
This Working Paper explores three approaches banks in Kenya have used to respond to mobile money. While nonbank mobile financial services can fundamentally reshape the financial sector in a developing market, as they have clearly done in Kenya, mobile services need not represent an existential threat to the traditional banking industry.
Download PDF: 
English (12 pages) | French (14 pages)
15 August 2017
Customers are turning to formal channels that use digital and mobile technologies for remittances because these are often able to offer services at lower costs. As more customers turn to formal services, remittances will have an even stronger developmental impact, notably in countries where protracted humanitarian crises affect large numbers of people.
Download PDF: 
English (91 pages) | Arabic (12 pages)

From Our Blog

QR codes in China
17 April 2018
China will soon require payments providers, including Alipay and WeChat Pay, to connect to a public online payments clearinghouse. Here’s what we know so far about how this institution will work and what it could mean for mobile payments.
06 February 2018
For interoperability to work, technology must do more than move transactions from Point A to Point B. It must be optimized to ensure security, encourage use, promote innovation and handle the inevitable time when something goes wrong.