Group photo with members of AFI CEMC and SMEF Working Groups

CEMC and SMEF Working Groups conclude meetings, look to add to AFI’s knowledge resources


The Consumer Empowerment and Market Conduct and SME Finance Working Groups concluded their meetings in Seychelles on Thursday after 4 days of productive discussions.

Welcome remarks were delivered by the Central Bank of Seychelles' Governor, Caroline Abel and AFI's Executive Director, Dr. Alfred Hannig. Governor Caroline Abel highlighted the importance of knowledge sharing among policymakers, saying "Years ago, productivity was attributed to those who retained the most knowledge. Today, however, productivity and efficiency is attributed to combining expertise with the experience and intelligence of peers discharging similar functions."

Later, participants from both Working Groups discussed AFI's overall working group strategy, cross-cutting policy concerns and were presented with an overview of key initiatives to advance financial inclusion in Seychelles.

Among the highlights of the first day was a joint session to find policy topics of mutual interest between both working groups with the aim of setting a common research agenda on regulatory and policy topics, and to determine potential collaborative efforts. In a survey held during the session, it was learnt that only a small fraction of institutions have conducted financial education campaigns for SMEs and an even smaller fraction have conducted impact assessments to measure the impact of such initiatives. The group agreed that there was a need to redefine MSMEs to ensure that the most vulnerable groups were protected under the law. Later, a panel on the impact of financial literacy and education was held with representatives from Yale University, SBS Peru and the Central Bank of the Russian Federation.

The second day started with a panel on converging global SME finance policies moderated by Dr. Hannig, where he urged panelists to consider potential alignments between AFI and the GPFI. On the panel were Mr. Matthew Gamser of the SME Finance Forum, Ms. Ghada Teima of the World Bank Group and Mr. David Myeni of AFI's SME Finance Working Group. The panelists highlighted the many ways that AFI and the GPFI have been collaborating and opportunities for future convergence. This includes enhanced coordination between AFI and the GPFI SME Finance Subgroup and increased collaboration to produce joint knowledge products. Mr. Gamser highlighted that AFI was considered the leader in the GPFI's SME finance work stream.

In the CEMC Working Group, members were asked to provide an overview on policy changes which had taken place in their countries as a result of their engagement with AFI. Updates were provided by representatives of 19 institutions, each giving specific examples of consumer protection progress made in their countries and any support they needed to take their progress further. Among the highlights; Central Bank of Jordan launched their national strategy and a new department was created for financial inclusion; Central Bank of Tanzania through their peer learning experience with AFI decided to enact a Consumer Protection Act and amend the Bank of Tanzania Act; El Salvador has included financial literacy in books in over 25 schools benefiting 1 million children; Bank of Zambia reviewed their Banking and Financial Services Act to strengthen components of consumer protection and created a chapter for consumer protection issues and Ombudsman; Central Bank of Ghana revised their Banking Act and drafted their financial inclusion strategy; Central Bank of Seychelles conducted a Baseline Survey for financial literacy in 2016.

The CEMC Working Group then conducted a series of Peer Reviews for recent policy initiatives by the Central Bank of Armenia, Reserve Bank of Zimbabwe, Da Afghanistan Bank, Bank of Papua New Guinea, Bank Negara Malaysia, Ministry of Finance of Swaziland, Banque Centrale du Congo and Central Bank of Liberia.

During the meetings the CEMC Working Group agreed to work on three work streams -- Institutional Framework and Supervision, Financial Literacy and Education, and Responsible Financing. The Institutional Framework and Supervision agreed to produce a Guideline Note on Impact Assessment, while the Financial Literacy and Education group will aim to produce an updated note on Development of Financial Education and Literacy programs.

The Responsible Financing work stream, renamed from Responsible Lending, will combine three previously published Guideline Notes and combine them into a consolidated publication on Responsible Financing; this Guideline Note will be enhanced to include emerging issues around digital financial services, gender and sustainable banking. The working group will also undertake financial education case studies on Uganda and Malaysia. Under the gender work stream, a survey on the status of financial education and literacy amongst women within the AFI network will be conducted. The working group has re-elected its Chair from the Central Bank Armenia and Co-Chair from the Banco Sentral Ng Pilipinas to drive the working group.

The SMEF Working Group sessions followed a similar theme, reviewing the latest policy changes in SMEF related issues, defining activities and knowledge products to be developed. The group identified four priorities to guide their discussions over the course of the meeting: financial education, multi-stakeholders facilitation, legal framework and the definition of MSMEs. There were presentations on criteria to define MSMEs and SME finance policies for MSMEs owned by women and women entrepreneurs by the Bangko Sentral ng Pilipinas and CNBV Mexico, as well as a presentation on policies developed by Bangladesh Bank to harness access to finance for women MSMEs. One key focus of the SMEF Working Group was on agricultural finance and access to finance for agri-MSMEs. A sharing session was conducted by representatives from the World Bank Group, Royal Monetary Authority of Bhutan and the Ministere des Finances et du Budget, Madagascar. Later, discussions on regulators' role in encouraging the use of DFS in SMEs were also held. The SMEF Working Group also elected its new leadership team; its new Chair from the Ministry of Finance of Swaziland, first Co-Chair from CNBV Mexico and second Co-Chair from the Reserve Bank of Fiji. Further, the working group agreed to adopt three new policy priorities: agri-finance, credit infrastructure and SME finance data. Under agri-finance, they have agreed to develop a case study on agricultural finance framework in Thailand; a case study on SACCOs regulation, prudential rules and supervision from Kenya; a policy catalogue on policymakers intervention in Africa to facilitate access to finance. For credit infrastructure, the group will assess the relevance of self-assessment tools to benchmark the level of progress on credit infrastructure. For SME finance data, the group will review the Guideline note on SME Base Set Indicators to benchmark the level of progress on credit infrastructure.

The working group meetings concluded on the fourth day with speeches by the first Deputy Governor of the Central Bank of Seychelles M. Christophe Edmond, Dr. Hannig and Mr. Eliki Boletawa. Deputy Governor Edmond reminded everyone of the importance of peer learning to accelerate progress and productivity, and stressed the need to continue investing resources in AFI’s important work. Dr. Hannig, in thanking participants, said “AFI’s leadership in financial inclusion comes from its member-led approach to policy development. It is the determination and commitment of AFI’s working groups that has defined this approach, and that will continue to drive our Alliance towards creating a more inclusive future.”

AFI’s next Working Group meetings will take place from 24-28 April, when the Financial Inclusion Strategy Peer Learning Group (FISPLG) and Financial Inclusion Data Working Group (FIDWG) gather in Tajikistan.