UNDP, Visa Partner to Boost Digital Transformation and Financial Inclusion in Somalia

NEW YORK: The United Nations Development Programme (UNDP) in Somalia and Visa, a global leader in digital payments have signed a partnership agreement aimed at helping accelerate the implementation of the Sustainable Development Goals (SDGs) in Somalia through digital financial inclusion and digital transformation with relevant institutions in Somalia. 

The collaboration was announced at an event organized on the sidelines of the UN General Assembly in New York on 25 September.

The partnership was sealed through a virtual signing of a Memorandum of Understanding (MoU) by UNDP Resident Representative Lionel Laurens and Aida Diarra, Senior Vice President and Head of Sub-Saharan Africa at Visa earlier in September.  

The MoU establishes a framework for UNDP Somalia and VISA Inc. to jointly advance digital financial services for Somali Micro, Small, and Medium Enterprises (MSMEs) and citizens, focusing on the underserved and vulnerable communities, through improving the public services and digitalizing the government systems and processes, in addition to raising financial awareness and implementing financial literacy programs for Somali MSMEs and individuals.

This will be achieved by jointly designing and implementing short and long term catalytic programs on building the capacity of national stakeholders, with a particular focus on private sector entities and relevant institutions such as the Central Bank of Somalia and the National Identification and Registration Authority (NIRA). UNDP Somalia and Visa Inc. will particularly support the scalability of the Somali digital national ID project with NIRA.  

Part of the UNDP-VISA joint program, to be designed and rolled out soon, will also include an initiative to advance digital payments and financial services focusing on Micro, Small, and Medium Enterprises (MSMEs) and youth and women entrepreneurs. SMEs are crucial to Somalia’s economic development, contributing approximately 80% of employment and 1.2% of the nation’s GDP.

However, these enterprises often face significant financial barriers, including high-interest rates, lack of collateral, and insufficient credit history. UNDP-VISA joint initiatives will seek to address these challenges by enhancing access to formal financing solutions and innovative financing tools.  

“We are delighted to start this exciting partnership with VISA to make progress on the Sustainable Development Goals (SDGs). This strategic collaboration will aim at advancing digital transformation and financial inclusion in Somalia,” said UNDP Somalia Resident Representative Lionel Laurens. “I strongly believe our new partnership with VISA will play a catalytic role in leveraging cutting-edge digital innovative solutions for the public and the private sector to address some of the persistent challenges facing Somalia. We hope many Somali people will benefit from this cooperation through enhanced access to digital financial services and public service delivery.”  

Aida Diarra, Senior Vice President and Head of Sub-Saharan Africa at Visa, added, “We are thrilled to collaborate with UNDP Somalia to advance digital transformation and financial inclusion across the region. Utilizing our knowledge in digital payments and financial services, we strive to empower Somali MSMEs and marginalized communities, thereby promoting economic growth and sustainable development. This partnership aligns with Visa’s mission to connect the world through the most innovative, reliable, and secure payment network, enabling individuals, businesses, and economies to thrive.” 

The collaboration will also support the creation of a robust e-Government infrastructure, aligning with Somalia’s National Transformation Plan and inclusive digital transformation goals.

VISA Inc. and UNDP Somalia also agree to share critical knowledge and insights related to financial inclusion and the digital economy.  

Source – UNDP