Data analysis boosts NFIS implementation & COVID-19 relief

COVID-19 has accelerated the need to collect macro-economic data that assesses the impact of relief measures on low-income groups, such as small businesses, women and agricultural workers, speakers said during virtual member training on 2-4 November.

Co-hosted by Bank Negara Malaysia (BNM), the three-day event highlighted how data underpins the formulation and implementation of successful national financial inclusion strategies (NFIS), a process bolstered by effective monitoring and evaluation (M&E).

“Data, when seen through a structured M&E framework, provides more insightful analysis into ‘whys’ and ‘whats’ of financial inclusion activities,” AFI Deputy Executive Director Nobert Mumba said in the event’s opening remarks. “A well-designed strategy proves effective only when it is backed by robust M&E, which helps us to reflect upon what is working and what isn’t”.

NFIS can play a pivotal role in accelerating a nation’s level of financial inclusion by outlining coordinated action in a comprehensive public document. Most of AFI’s 99 member institutions have already begun developing their own NFIS, with some already working on the second and third versions of these strategies.

“At whatever stage a country is, the importance of collecting financial inclusion data, analyzing it and then using it for policy making cannot be overstated,” Mumba said, adding that this central role is reinforced in key AFI policy models on core set indicators and NFIS.

While comprehensive data is a vital part of M&E the effectiveness of financial inclusion policies, BNM Director of Development Finance and Inclusion Datin Arlina Ariff emphasized the need for a flexible approach.

“Data needs can rapidly change due to the evolving environment, for example, the rapid pace of innovation in digital payments and the impact of the pandemic on the level of unemployment and poverty,” Ariff said.

“These developments will result in new and unprecedented data requirements for effective policy making and, as such, cooperation among relevant stakeholders is key in closing these data gaps to carry out our national financial inclusion strategies”.

Beyond ensuring the effective implementation of existing developmental initiatives, she said that BNM was also focused on building resilience to ensure that even the most vulnerable segments would not be left behind.

“Our strategies will not only focus on improving accessibility but will also include promoting greater awareness on financial education and digital financial literacy for targeted segments”.

AFI member training on NFIS is held annually and is among the network’s most in-demand capacity building events. In this most recent round, around 120 participants from 40 countries explored topics ranging from the usage of data for NFIS decision-making to M&E frameworks for NFIS, their application and thematic issues.

Technical experts from member institutions in Fiji, Malaysia, Mexico, Mozambique, Nigeria, Paraguay, the Philippines and Rwanda provided valuable insight into experiences from their own jurisdictions, while non-members Data2X, Financial Alliance for Women, FinMark Trust, UNCDF and the World Bank shed light on opportunities and challenges from their stakeholder perspectives.

AFI knowledge products were used to help participants understand the usage of data at different stages of NFIS within the context of the broader M&E framework. By the end, participants were able to list the different elements of data collection, learn from shared country examples on data use for decision-making in NFIS, be familiar with AFI’s M&E toolkit and its application in NFIS, and deliberate cross-cutting issues related to sex-disaggregated data and the implications of COVID-19 on data collection.

Underscoring the achievements of the capacity building event, the deputy director of BNM’s Human Capital Development Centre, Ruziana Mohd Mokhtar, said that the findings and lessons learnt would lead to better policy development and implementation during these current difficult times.

“With countries, regulators and government having to allocate scarce resources to people in need, the lessons and ideas we discussed show the importance of having good data to enable us to be more targeted in our policy development,” Mokhtar said.

AFI’s capacity building activities are based on peer learning, in which participants gain knowledge by sharing and exchanging information. Each member training event is designed to meet the learning needs identified by members and delivered, most often, by the members themselves ensuring optimal use of the experience and expertise of the network.

BNM was among AFI’s founding partners and cemented this long-standing relationship with the 2015 opening of the network’s permanent headquarters in Kuala Lumpur, Malaysia. Since then, both entities have frequently collaborated on capacity building and other network activities, including in-person events held earlier this year on cybersecurity and financing for small businesses.