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FINTECH IS ACCELERATING THE DIGITAL TRANSFORMATION OF BANKING IN AFRICA

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FINTECH IS ACCELERATING THE DIGITAL TRANSFORMATION OF BANKING

Due to their potent blend of trail‐blazing technology and disruptive innovation, FinTech players have the ability to accelerate the digital transformation of financial services in Africa and, in turn, further spur incumbent banks to rapidly ramp‐up their own innovation initiatives to meet the financial needs of under‐served markets across the continent.

ethico liveFinTech players are increasingly becoming an important part of the fabric of Africa’s financial services ecosystem and the leading banks on the continent are now more urgently seeking to harness technology innovations, collaborate with FinTech start‐ups, and create a platform to scale much faster – to make digital financial services pay.

Across Africa huge game‐changing leaps are currently taking place which are transforming economies on the continent ‐ and helping to drive forward key strategic priorities such as financial inclusion. The impact of Blockchain, Open Banking, Mobile Money and Payments innovation are radically transforming the financial services landscape as FinTech disruptors intensify the challenge to incumbent banks in Africa and kickstart new opportunities.

Finnovation Africa: Ethiopia 2017, which willbe held on the 3rd of November 2017 at the Radisson Blu Addis Ababa, will gather international FinTech experts together with African pioneers, investors, entrepreneurs and leading bankers, to harness the FinTech revolution to boost strategic economic priorities such as financial inclusion and deepening – and how FinTech can make a positive and profitable difference in Africa. The event will also explore how the major banks and financial institutions on the continent are addressing the digital transformation of financial services; and how their own digital innovations are being shaped and accelerated as a result of the gathering momentum of FinTech disruptors.

The unique environment for financial services in Africa is fertile ground for innovative FinTech players who are capitalising on the opportunities to disrupt or leapfrog established business models to make financial services more affordable, accessible and profitable across the continent.Finnovation Africa: Ethiopia 2017 is delighted to welcome a stellar list of keynote speakers, including
Chris Principe, CEO of Chain2Trade, Inc. and Founder of FinFuture & Financial IT magazines;
Yasaman Hadjibashi,Group Chief Creation Officer of Barclays Africa Group;
Mountaga Diop, Founder & CEO of BelCash;
Ermias Eshetu, CEO of Ethiopia Commodity Exchange;
Aaron Fu, Managing Partner, Africa of NEST.vc;
Ken Njoroge, CEO of Cellulant;
Murad Qubbaj, Associate Director and Business Channels Development of Pio-Tech; and
Ameya Upadhyay, Principal, Investments of Omidyar Network.
The opening keynote session will define directions on Aligning the Role of Government Policymakers, Incumbent Banks, FinTech Innovators, Investors, Multilateral Agencies, MNOs and the Private Sector to Create a Dynamic Ecosystem for FinTech in Africa.

Finnovation Africa: Ethiopia 2017 will also provide a platform to connect innovative start-ups with leading investors in the African FinTech space and the Wolves’ Den session is one of the most dynamic features of the event.The Wolves’ Den enables innovative FinTech start-ups and trail-blazers to real-time test the positive impact of their solutions. A panel representing savvy Investors/ Venture Capitalists and seasoned African Fintech Pioneers will evaluate the business model of each chosen start‐up or trail‐blazer in a high-stress 10 minute “elevator pitch” to the “Wolves” who will ask the tough questions and provide the illuminating insights.

Murad Qubbaj, Associate Director, Business & Channels Development of Pio-Tech, speaking ahead of his participation in the event, said that: “A combination of limited access to financial services, high mobile penetration and strong entrepreneurial spirit are some of the key reasons behind the acceleration of financial services innovation in Africa, with some of the most innovative FinTech and banking solutions being developed in and for the region. Recent research has revealed that almost a third of the money invested in African start-ups was consumed by new FinTech firms and the Finnovation Africa: Ethiopia 2017 event has created a unique platform for these start-ups and trail-blazers, the broader FinTech ecosystem, as well as the incumbent banking powerhouses across Africa to engage and learn from each other.”

Speaking ahead of his participation in Finnovation Africa: Ethiopia 2017, Mountaga DiopFounder & CEOBelCash, said that: “Industry leaders from across the African and global FinTech industry will gather at Finnovation Africa: Ethiopia 2017 where they will seek to harness the growing momentum around digital financial services into more inclusive and productive economies across Sub‐Saharan Africa.”

Mr. Diop continued by saying, “As the formal economy grows we see individuals, communities, and nations prosper and make progress on strategic growth and development priorities. When unbanked and underbanked communities have access to digital financial services, everyone benefits and FinTech can play a vital role in driving financial inclusion imperatives across the continent. There is an opportunity to change people’s lives while building scalable, profitable companies that consumers need and want.”

Finnovation Africa: Ethiopia 2017 will take place at the Radisson Blu in Addis Ababa, Ethiopia on the 3rd of November 2017 and will gather all stakeholders and influencers in the African FinTech ecosystem, from start-ups to banking powerhouses, from the key markets across Africa and internationally.

Banking

ECB stays put but warns about surge in infections

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ECB stays put but warns about surge in infections 1

By Balazs Koranyi and Francesco Canepa

FRANKFURT (Reuters) – The European Central Bank warned on Thursday that a new surge in COVID-19 infections poses risks to the euro zone’s recovery and reaffirmed its pledge to keep borrowing costs low to help the economy through the pandemic.

Having extended stimulus well into next year with a massive support package in December, ECB policymakers kept policy unchanged on Thursday, keen to let governments take over the task of keeping the euro zone economy afloat until normal business activity can resume.

But they warned about a new rise in infections and the ensuing restrictions to economic activity, saying they were prepared to provide even more support to the economy if needed.

“The renewed surge in coronavirus (COVID-19) infections and the restrictive and prolonged containment measures imposed in many euro area countries are disrupting economic activity,” ECB President Christine Lagarde said in her opening statement.

Fresh lockdowns, a slow start to vaccinations across the 19 countries that use the euro, and the currency’s strength will increase headwinds for exporters, challenging the ECB’s forecasts of a robust recovery starting in the second quarter.

Lagarde saluted the start of vaccinations as “an important milestone” despite “some difficulty” and said the latest data was still in line with the ECB’s forecasts.

She conceded that the strong euro, which hit a 2-1/2 year high against the dollar earlier this month, was putting a dampener on inflation and reaffirmed that the ECB would continue to monitor the exchange rate.

The euro has dropped 1% on a trade-weighted basis since the start of the year, but is up nearly 7% over the last 12 months. Against the U.S. dollar, that number rises to over 10%.

MORE STIMULUS?

Opening the door for more stimulus if needed, Lagarde confirmed the ECB would continue buying bonds until “it judges that the coronavirus crisis phase is over”.

Lagarde also kept a closely watched reference to “downside” risks facing the euro zone economy, which has been a reliable indicator that the ECB saw policy easing as more likely than tightening.

But she signalled those risks were less acute, in part thanks to the recent Brexit deal.

“The news about the prospects for the global economy, the agreement on future EU-UK relations and the start of vaccination campaigns is encouraging,” Lagarde said. “But the ongoing pandemic and its implications for economic and financial conditions continue to be sources of downside risk.”

Lagarde conceded that the immediate future was challenging but argued that should not impact the longer term.

“Once the impact of the pandemic fades, a recovery in demand, supported by accommodative fiscal and monetary policies, will put upward pressure on inflation over the medium term,” Lagarde said.

Benign market indicators support Lagarde’s argument. Stocks are rising, interest rates are steady and government borrowing costs are trending lower, despite some political drama in Italy.

There is also around 1 trillion euros of untapped funds in the Pandemic Emergency Purchase Programme (PEPP) to back up her pledge to keep borrowing costs at record lows.

The ECB has indicated it may not even need it to use it all.

“If favourable financing conditions can be maintained with asset purchase flows that do not exhaust the envelope over the net purchase horizon of the PEPP, the envelope need not be used in full,” Lagarde said.

Recent economic history also favours the ECB. When most of the economy reopened last summer, activity rebounded more quickly than expected, indicating that firms were more resilient than had been feared.

Uncomfortably low inflation is set to remain a thorn in the ECB’s side for years to come, however, even if surging oil demand helps put upward pressure on prices in 2021.

With Thursday’s decision, the ECB’s benchmark deposit rate remained at minus 0.5% while the overall quota for bond purchases under PEPP was maintained at 1.85 trillion euros.

(Editing by Catherine Evans)

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Bank of Japan lifts next year’s growth forecast, saves ammunition as virus risks linger

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Bank of Japan lifts next year's growth forecast, saves ammunition as virus risks linger 2

By Leika Kihara and Tetsushi Kajimoto

TOKYO (Reuters) – The Bank of Japan kept monetary policy steady on Thursday and upgraded its economic forecast for next fiscal year, but warned of escalating risks to the outlook as new coronavirus emergency measures threatened to derail a fragile recovery.

BOJ Governor Haruhiko Kuroda said the board also discussed the bank’s review of its policy tools due in March, though dropped few hints on what the outcome could be.

“Our review won’t focus just on addressing the side-effects of our policy. We need to make it more effective and agile,” Kuroda told a news conference.

As widely expected, the BOJ maintained its targets under yield curve control (YCC) at -0.1% for short-term interest rates and around 0% for 10-year bond yields.

In fresh quarterly projections, the BOJ upgraded next fiscal year’s growth forecast to a 3.9% expansion from a 3.6% gain seen three months ago based on hopes the government’s huge spending package will soften the blow from the pandemic.

But it offered a bleaker view on consumption, warning that services spending will remain under “strong downward pressure” due to fresh state of emergency measures taken this month.

“Japan’s economy is picking up as a trend,” the BOJ said in the report, offering a slightly more nuanced view than last month when it said growth was “picking up.”

While Kuroda reiterated the BOJ’s readiness to ramp up stimulus further, he voiced hope robust exports and expected roll-outs of vaccines will brighten prospects for a recovery.

“I don’t think the risk of Japan sliding back into deflation is high,” he said, signalling the BOJ has offered sufficient stimulus for now to ease the blow from COVID-19.

NO EXIT EYED

Many analysts had expected the BOJ to hold fire ahead of a policy review in March, which aims to make its tools sustainable as Japan braces for a prolonged battle with COVID-19.

Sources have told Reuters the BOJ will discuss ways to scale back its massive purchases of exchange-traded funds (ETF) and loosen its grip on YCC to breathe life back into markets numbed by years of heavy-handed intervention.

Kuroda said the BOJ may look at such options at the review, but stressed a decision will depend on the findings of its scrutiny into the effects and costs of YCC.

He also made clear any steps the BOJ would take will not lead to a withdrawal of stimulus.

“It’s too early to exit from our massive monetary easing programme at this point,” Kuroda said. “Western economies have been deploying monetary easing steps for a decade, and none of them are mulling an exit now.”

(Reporting by Leika Kihara and Tetsushi Kajimoto; additional reporting by Kaori Kaneko; Editing by Simon Cameron-Moore & Shri Navaratnam)

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World Bank, IMF agree to hold April meetings online due to COVID-19 risks

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World Bank, IMF agree to hold April meetings online due to COVID-19 risks 3

WASHINGTON (Reuters) – The International Monetary Fund and the World Bank have agreed to hold their spring meetings, planned for April 5-11, online instead of in person due to continued concerns about the coronavirus pandemic, they said in joint statement.

The meetings usually bring some 10,000 government officials, journalists, business people and civil society representatives from across the world to a tightly-packed two-block area of Washington that houses their headquarters.

This will be the third of the institutions’ semiannual meetings to be held virtually due to the pandemic.

(Reporting by Andrea Shalal; Editing by Chris Rees

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