AFI member institutions develop, publish and implement high-level policy documents in various fields of financial inclusion, including consumer protection, digital financial services, financial inclusion data, national financial inclusion strategy, global standard proportionality, inclusive green finance and SME finance. This resource center page presents a non-exhaustive list of examples of financial inclusion policy documents in the AFI network and beyond.
For detailed data analysis, you may connect to the AFI Data Portal (ADP), a unique integrated global database of financial inclusion policies, regulations, and outcomes, built by policymakers for policymakers and the public.
The importance of financial education, its role as a complement to financial inclusion and consumer protection policies, and its contribution to financial stability has led many countries to develop a national financial education strategy (NFES). Financial education is seen as a tool to increase financial literacy and AFI defines financial education as “a process of providing people with the knowledge, skills, attitude, and exposure through access to relevant objective information, and training to enable them to make informed financial decisions and take actions appropriate to their circumstances.”
Standalone education/literacy strategy
As part of NFIS
Financial consumer protection refers to policies and practices designed to promote stable and inclusive financial services via two interconnected pillars: 1) empowering consumers to make more informed financial decisions via the provision of information, education and effective avenues for redress, and 2) protecting consumers via effective regulation, supervision and enforcement of market conduct by financial services providers.
Policy Addressing Key Policy Areas: DFS, Fintech, Financial Education, Gender, SME Finance, (Micro) Insurance, Youth, Forcibly Displaced People, and Green Finance
Open Banking refers to a progressive financial concept wherein a country’s financial institutions, fintech firms, and other authorized entities collaborate to create an interconnected ecosystem through the secure exchange of financial data. The scope and nature of open finance efforts can range from regulatory mandates to collaborative industry endeavors, all ultimately centered around empowering individuals and entities to leverage their financial data more effectively. Currently, 34 member countries of the Alliance for Financial Inclusion (AFI) have successfully implemented open finance regulations, with an additional 2 countries in the process of drafting similar frameworks. Conversely, 40 countries do not yet possess relevant regulations in this domain. Full report is available here: https://www.afi-global.org/publications/digital-financial-services-regulation-current-state-of-practice-report/
Initiatives Related to Open Finance: Regulator-Mandated, Facilitated, or Industry-Led
A Payment System Act or Law of Payment System is a legislative framework established by a government to regulate and oversee the operation, structure, and interactions of payment systems within a country’s financial ecosystem. This legal framework sets out the rules, standards, and guidelines that govern various aspects of payment systems, including electronic fund transfers, card payments, digital wallets, and other forms of financial transactions. The act aims to ensure the smooth, secure, and efficient functioning of payment systems, while also addressing issues such as consumer protection, fraud prevention, data security, and competition. It delineates the roles and responsibilities of stakeholders involved in payment systems, such as financial institutions, payment service providers, regulators, and users, contributing to the overall stability and integrity of a nation’s financial infrastructure. Notably, almost all of the Alliance for Financial Inclusion (AFI) member countries (92%) have ratified a Payment Systems Act or Law, underscoring the global recognition of the importance of regulatory frameworks in maintaining robust payment systems. Full report is available here: https://www.afi-global.org/publications/digital-financial-services-regulation-current-state-of-practice-report/
Ratified Payment Systems Act or Payment Systems Law
E-Money, Mobile Money, and Mobile Financial Services involve the use of mobile phones and related technologies to provide financial services, including payments, transfers, and savings. It allows users to store money in a digital account linked to their mobile number and perform transactions using their phones, even without a traditional bank account. Mobile money services often play a crucial role in providing financial access to unbanked and underbanked populations, particularly in areas with limited banking infrastructure. This term refers to the regulatory framework established by a government or relevant authorities to govern and oversee mobile financial services, including e-money, mobile money and related digital transactions. These regulations are designed to ensure the security, reliability, and transparency of mobile financial transactions. They cover aspects such as customer protection, anti-money laundering measures, data privacy, interoperability between different mobile money providers, and the overall operational standards of mobile financial service providers. Such regulations aim to foster consumer trust, promote financial inclusion, and maintain the integrity of mobile financial systems. Nearly all countries, constituting 96%, have adopted regulations for mobile financial services. Only 2 countries have not yet implemented these regulations, and 1 country is currently in the developmental phase. Full report is available here: https://www.afi-global.org/publications/digital-financial-services-regulation-current-state-of-practice-report/
Regulations in Place for E-Money, Mobile Money, and/or Mobile Financial Services
National Financial Inclusion DSS, including the ones focused on consumers and the ones focusing on SMEs are a fundamental tool to measure baseline indicators on access, usage and quality of financial services used to define financial inclusion policy objectives, measure progress achieved, as well as key outcomes, usually aligned with National Financial Inclusion Strategies and/or specific financial development policies. Usually, National DSS have been undertaken on a regular basis each 3 to 5 years and are increasingly linked to the results frameworks related to NFIS.
National Financial Inclusion targeting Consumers/Households Survey Reports
National Financial Inclusion SME Finance Survey Reports
National Financial Inclusion Reports represent an appropriate channel to disseminate financial inclusion outcomes to key stakeholders, including National Financial Inclusion Strategy Committees, diverse policymakers and regulators, the financial industry, and organizations representing targeted groups in financial inclusion policies. Usually, these reports are released either on an annual, semi-annual, or quarterly frequency.
Financial Inclusion Dashboards are increasingly becoming an important channel to share and disseminate key financial inclusion indicators to policymakers, the financial industry, and organizations representing targeted groups. Usually, the dashboards are published online on National Financial Inclusion Councils or at financial regulatory institutions websites. Additionally, to key financial inclusion indicators, usually the dashboards also include key policy targets, and other benchmarks.
National financial inclusion strategies (NFIS) are developed through broad consultative processes involving, among others, public and private sector stakeholders engaged in financial sector development. The growing number of NFIS across all regions shows the influence of knowledge and peer learning on strategy development. Global trends in financial inclusion strategies include emerging issues such as climate change and marginalized groups. In addition to women, other groups that need to be considered when building national financial inclusion include youth, forcibly displaced persons and people with disabilities.
National Financial Inclusion Strategies
Electronic Know Your Customer (e-KYC) regulations refer to the digital processes and technologies implemented by financial institutions and businesses to verify the identify of their customers remotely. These regulations aim to streamline and enhance customer onboarding by using electronic documents and biometric authentication while ensuring compliance with anti-money laundering (AML) and counter-terrorism financing (CTF) measures. eKYC plays a crucial role in promoting financial inclusion by making it easier for individuals who lack traditional identification documents to access financial services and bridge the gap between the unbanked population and financial services, fostering greater economic participation and inclusion.
Laws & Regulations
FSAP is a joint effort by the International Monetary Fund (IMF) and the World Bank to evaluate a country’s financial sector health, stability, and regulatory framework. It offers recommendations to enhance financial system resilience and promote sustainable economic growth. Recommendations from the FSAP can guide policymakers in designing inclusive financial systems that cater to a broader range of individuals and businesses.
Virtual assets regulation refer to the set of rules and guidelines implemented by governments and financial authorities to oversee and manage cryptocurrencies and other digital assets. These regulations aim to ensure consumer protection, prevent illicit activities, and promote a safe and transparent environment for the use and exchange of virtual assets. This regulation can support financial inclusion policies by providing a structured framework for the integration of digital currencies and blockchain technology into mainstream financial systems.
Laws & Regulations
National risk assessments are systematic evaluations conducted by governments to identify and analyze potential risks related to money laundering, terrorist financing, and other financial crimes within a country. By analyzing vulnerabilities in the financial system, it helps provide a nuanced understanding of potential risks and vulnerabilities in the financial system, which can ultimately help support the development of inclusive financial services that cater to a broader range of individuals and businesses.
Executive summary of National Risk Assessment
Regulators in the AFI network have begun responding, often with urgency, with strategies, policies and regulations to mitigate and build resilience to the impacts of climate change in their respective countries. There is an emerging trend in the network to link financial inclusion and climate change on a national strategic level, either in a national financial inclusion strategy (NFIS) of other financial sector strategies.
NFIS with green elements
Other related financial sector strategies
AFI’s 4P framework provides financial regulators with an intuitive was to consider the full range of policy actions they can take for inclusive green finance. All policies under the 4Ps either catalyze financial services for the private sector or use financial infrastructure to deploy finance for climate action.
Promotion policies and initiatives prepare the private sector to offer financial services for green projects or related climate action activities to qualifies beneficiaries, for example, through awareness raising, information sharing, capacity building and data collection.
Provision policies help to ensure financial resources for green projects or related climate action activities are provided for qualified beneficiaries, whether through lending policies, refinancing or other financing schemes.
Protection policies reduce financial risk by “socializing” potential losses through insurance, credit guarantees, socializing payments or other related risk-sharing mechanisms.
Prevention policies aim to avoid undesirable outcomes by lowering financial, social and environmental risks.
AFIs Inclusive Green Finance (IGF) workstream is part of the International Climate Initiative (IKI) supported by the German Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU), based on a decision of the German Bundestag.
This page is inspired by the “Policy Model for MSME Finance” and the objective of this Policy Model is to guide members through a set of principles and the key elements to be considered in developing or reviewing their MSME finance policies. The principles are derived from the AFI network, complemented by insights from other international stakeholders in MSME development. They comprise of six pillars that highlight the minimum policy guidance for developing an MSME Finance Policy. Each pillar is covered by specific guiding principles that are derived from the AFI network’s best practices and their codification from several knowledge products issued over the years by AFI’s SME Finance Working Group. Other international best practices are also embedded in these guiding principles.
Framework targeting MSMEs, MSME definition
Policy measures for an effective MSME finance, target-based lending, payment system
Credit info, guarantee schemes, secured transaction
Asset & Accounts Receivable-Based Finance, Warehouse Receipt, Crowdfunding
Coordination & Collaboration, Institutional Capacity & Upskilling, Consumer Protection, Crisis Management, creditor’s right
Women-Owned/Led, Youth, Green Based MSMEs, Informal Sectors