AFI promotes country-led, peer-to-peer cooperation model at high-level meeting on financing for development in Asia-Pacific

AFI sent a delegation to the Republic of Korea for this week’s important “First High-Level Follow-up Dialogue on Financing for Development in Asia and the Pacific,” to participate in a session dedicated to financial inclusion on 31 March.

The conference was co-hosted by the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) and the Ministry of Foreign Affairs, Republic of Korea.

AFI was represented by Deputy Executive Director Norbert Mumba, as well as a number of members of the network. In addition to Mr. Mumba, the full panel consisted of: Azeema Adams, Governor at the Maldives Monetary Authority; Chiranjivi Nepal, Governor at Nepal Rastra Bank; Nerses Yeritsyan, Deputy Chairman at the Central Bank of Armenia; Neav Chanthana, Deputy Governor at the National Bank of Cambodia; Riaz Riazuddin, Deputy Governor at the State Bank of Pakistan; P. Nandalal Weerasinghe, Deputy Governor at the Central Bank of Sri Lanka; Wook Sohn; and President at the Economic Research Institute Bank of Korea.

This session on financial inclusion in particular was designed to highlight the different approaches that policymaking institutions in the region have taken to design and implement national financial inclusion strategies, and to discuss how these policies have been effective in fostering greater financial inclusion for citizens and firms.

“Financial inclusion requires out-of-the-box thinking,” said Mr. Riazuddin. “Innovation aimed at altering the scope and reach of financial services is key to addressing the challenges to financial inclusion that we face in our markets.”

Key questions addressed by the panel included:

• How could financial institutions be incentivized to provide more and better quality financial services to households and firms?
• What business models and innovations have been the most effective?
• What is the scope for peer learning and experience sharing among countries, including through AFI?

Mr. Mumba highlighted the wide array of member services that AFI employs, and the importance of the network’s South-South, bottom-up, peer-led approach, which strengthens member commitment and ensures systematic learning. It was noted that AFI’s mode of delivery is economic, with a lean staff base and significant results achieved by members at relatively low cost, including 165 policy changes.

Several examples of achievements by member institutions on the panel included:

• Through interaction and knowledge exchange with policymakers from other countries, and learning from their experiences at the AFI forums, the Bank of Pakistan was able to develop policies directed toward ensuing successful implementation of their National Financial Inclusion Strategy.
• The Central Bank of Armenia, with a grant from AFI, undertook its Financial Capability Assessment Project (FCAP) from 2013 as part of the National Strategy on Financial Education (NFSE). The FCAP provides a sound framework for comprehensive monitoring and of the effectiveness and public accountability of the NSFE.

“Financial inclusion leads to inclusive, sustainable growth, therefore it is essential to devise effective strategies for FI and to share our experiences,” said Mr. Azeema Adam. “Effective financial inclusion policies empower marginalized populations and women, and we know that empowered women who have access to quality financial services are better able to lift their families out of poverty and improve their family’s quality of life.”

The dialogue’s outcomes from this session, as well as the other five sessions during the event, will inform the deliberations being convened by the President of ECOSOC, on 18-20 April 2016 in New York City. Those global deliberations look to develop a formal framework for follow-up and review, which will set the qualitative assessment framework and quantitative targets and indicators for implementation of the Addis Agenda.

The United Nations adopted the Addis Ababa Action Agenda in 2015, which made a robust case for the role of financial inclusion, committing the international community to work toward full and equal access to formal financial services for all, adopting or reviewing national financial inclusion strategies in consultation with relevant stakeholders, and including financial inclusion as a policy objective in financial regulation in accordance with national priorities and legislation.

The Agenda singled out the Alliance for Financial Inclusion as the ideal partner for facilitating financial inclusion peer learning and experience-sharing among countries and regions. The UN General Assembly then stated the full implementation of the Addis Ababa Action Agenda is critical for the realization of the Sustainable Development Goals.

“Given our focus on South-South cooperation, convergence and financial sustainability, AFI is well-positioned to move the Addis Ababa Action Agenda forward,” said Mr. Mumba. “Going forward, the financial inclusion agenda is large—it is not just about access. It is about usage, quality and sustainability. To address this agenda, the primary keys to success will be effective partnerships and proper financing aimed at building the capacity of regulatory and policymaking institutions to improve financial inclusion policy.”

The meeting was also notable in that it was the Republic of Korea’s G20 Presidency that saw the launch the GPFI at the 2010 Seoul Summit, where AFI was designated as an implementing partner. This was a major milestone, helping to move the issue of financial inclusion from the fringe to the mainstream on the international development agenda.