ECAPI experts outline major financial inclusion achievements

Expert members from AFI’s Eastern Europe & Central Asia Policy Initiative (ECAPI) gathered for their bi-annual meeting during which they outlined recent significant progress and agreed on next steps in the pursuit of achieving financial inclusion goals.

The 5th Experts Group on Financial Inclusion Policy (EGFIP), co-hosted by the Central Bank of Armenia (CBA), kicked off discussions with a customary “tour de table” that saw each ECAPI member provide country updates on relevant policy changes and reforms.

As members expanded on their recent achievements, it was clear that ECAPI members have made significant strides in furthering financial inclusion across their jurisdictions.

Among them was National Bank of Tajikistan (NBT), highlighting the launch of several new systems – a real time gross settlement system, central securities depository, clearing house and instant transfer system for QR payments.

NBT’s Jahongir Aminjanov explained that the central bank was continually stepping up efforts to promote digital financial services (DFS) with policies that included raising the limits on contactless payments and targeting rural areas.

“While there are numerous barriers in our legislation, hopefully this week or next week, we will allow credit institutions to offer remote identification and remote financial services,” he explained.

Other notable changes were recorded by National Bank of the Republic of Belarus’s Anton Podrez, who drew attention to a presidential decree on digital banking technology that expanded the list of institutions able to provide remote services to consumers, such as insurance and microfinance organizations.

“Soon there won’t be any need for non-residents to come to Belarus to become a financial client of the country as they will have the possibility to do it remotely,” he said.

Podrez also ran through some of the central bank’s key responses to the ongoing COVID-19 outbreak aimed at mitigating negative effects on the economy, including a focus on instant payments and the implementation of international standards.

Meanwhile, Central Bank of Uzbekistan’s Sanjar Nosirov added that the regulator was planning to develop regulations on outsourcing banking activities that outline which services can be outsourced and how to regulate them.

CBA staff then delivered presentations on various knowledge products produced by ECAPI since 2019, including The Long-Term Effectiveness of Financial Education Classroom Workshops in Rural Areas: The Case of Armenia, The Financial Competency Matrix for Adults: A Policy Framework and Key Facts Statements for Credit: Do They Work? The Experience of Armenia.

Opening a separate session on brainstorming the application of these ECAPI deliverables, Central Bank of Russian Federation’s Nadezhda Prasolova encouraged participants to put their plans into action by emphasizing that the region’s financial regulators should now push forward with implementation.

Underscoring the importance of financial education was Financial Regulatory Commission of Mongolia’s (FRC Mongolia) Ulziibat Molomjamts, who noted that his institution had helped launch the country’s National Program on Financial Literacy.

The five-year program, which will run until 2021, aims to reverse limited levels of knowledge of money financial markets, including on credit and insurance. This, he said, had prompted the decision to make financial education mandatory in secondary schools, which he said will be “very crucial for children in order to increase public awareness”.

Echoing this sentiment was Agency for Regulation and Development of the Financial Market of the Republic of Kazakhstan’s Saniya Omirzakova, who said that the recently established agency was currently working on financial literacy. The new agency was launched in January with the responsibility of protecting consumers of financial services and maintaining stability in the financial system.

In terms of next steps, members agreed to focus this year’s knowledge products on topics that reflect the recent global rise in the use of DFS as a direct response to the COVID-19 crisis, and the subsequent need to protect consumers against related risks.

Central Bank of Armenia’s Sevak Mikayelyan, who is also ECAPI EGFIP Chair, emphasized the importance of cooperation among regional players on consumer protection, particularly on cross-border transfers.

“Armenia receives a huge amount of transfers. As a big part of our gross domestic product, it is very critical for us to have a shared platform with regional countries to minimize the risks and costs for consumers,” he said.

Around 60 participants took part in the meetings on 1-2 June, including members from seven countries represented by ECAPI: the central banks of Armenia, Belarus, Russia, Tajikistan and Uzbekistan as well as the Agency for Regulation and Development of the Financial Market of the Republic of Kazakhstan and FRC Mongolia.

Speakers also noted that the position of EGFIP Vice Chair was open for candidates, who will join Central Bank of Armenia in its position as chair.

Members from outside ECAPI were also invited to share their insight, with presentation from Thomas Koon Peng of Bank Negara Malaysia, Pia Bernadette Tayag from Bangko Sentral Ng Pilipinas and Mohamed Helmy from Central Bank of Egypt.

After two days of discussions with EGFIP members, the event’s final day will see members take part in capacity building training on digital financial literacy in the digital area. Member training sessions will not only involve members from across the region, as well as knowledge exchange partners and funders, including the European Central Bank and Bank of Finland.

Central Bank of Armenia Deputy Governor Vakhtang Abrahamyan and AFI Executive Director Dr. Alfred Hannig opened the three-day virtual event, first AFI regional initiative to be held virtually given the magnitude of the global crisis posed by COVID-19.

ECAPI, AFI’s newest regional initiative, is the primary platform for AFI member institutions in the Eastern Europe and Central Asia (EECA) region to support and develop financial inclusion policy and regulatory frameworks, and to coordinate regional peer learning efforts. Launched in 2018, ECAPI aims to resolve regional challenges and elevate the voice of the EECA region on key financial inclusion policy issues. Within ECAPI are technical staff who make up EGFIP are nominated as primary or alternate members and are directly involved in the technical work of financial inclusion.