Peer learning & knowledge exchange among AFI members: Transforming market conduct to enhance consumer protection
As part of a grant offered by AFI, the Ministry of Finance (MoF) of Swaziland conducted a Learning Exchange Program on consumer protection and financial literacy with the Bank of Ghana (BoG). The objective of the program was to learn from BoG on relevant legislative and regulatory frameworks, complaints and disputes resolution mechanisms, transparency and disclosure, and the implementation of financial literacy programs supporting financial inclusion.
These are key takeaways from the program:
- The need to ensure that an up-to-date legislative and regulatory framework is in place to provide sufficient guidance and enforcement mechanisms for consumer protection.
- Effective collaboration of various functions and divisions within the Bank to better monitor and share information on market conduct issues and support financial stability.
- Provision of a dedicated unit with sufficient capacity to look after market conduct issues.
- Emphasis on the responsibility of individual financial institutions to resolve complaints, disputes and reporting systems for the regulator to monitor, and supervise the situation.
- Mobilization of resources to support the implementation of financial literacy programs.
Improving the quality of financial inclusion
Though more than two-thirds (64 percent) of the Swazi adults are formally served, a significant number are excluded or face a large number of access barriers notably low affordability, and sometimes onerous documentation requirements.
In January 2018, the Government of the Kingdom of Eswatini along with the company of AFI launched its National Financial Inclusion Strategy (NFIS) 2018 – 2022 with His Excellency the Prime Minister, Dr. Sibusio Barnabas Dlamini re-enforcing the country’s commitment to support access to affordable and quality financial services as the key strategy to better impact on poverty.
The current provisions for consumer protection in the country are fragmented over a number of pieces of legislation across the two financial regulators, the Central Bank of Swaziland and the Financial Services Regulatory Authority. The harmonization and improvement of the framework is essential to ensure that sufficient guidance, monitoring and enforcement mechanisms are in place.
Download Swaziland’s National Financial Inclusion Strategy to learn more.
What are next steps?
An active member of the AFI network, the MoF of Swaziland will be convening key stakeholders to assess the current landscape and identify gaps. Other initiatives to enhance consumer protection include:
- Liaise with the current financial legislative & reform process under the Financial Sector Development Implementation Plan to inform the inclusion of key provisions to enhance consumer protection.
- Conduct the Financial Capability Survey 2018 to provide the diagnostic to inform the development of the National Financial Education Strategy.
- Support the emphasis for the financial institutions to adopt a market approach to consumer protection as a strategy to better position and differentiate the institution’s offer.
Moving forward with AFI’s support, Swaziland will fulfill its remaining targets under the Maya Declaration including establishing the National Financial Literacy Framework by 2018 and ensuring balance between equitable economic growth and financial stability. MoF Swaziland is very much grateful to AFI and BoG for making it possible to host and share their experiences with the Swazi Delegation.