AFI conducted a Q&A with Central Bank of Trinidad and Tobago (CBTT) Governor Jwala Rambarran on a variety of financial inclusion related issues a week after CBTT became the 100th member instiution at AFI.

AFI: What are the main financial inclusion issues in Trinidad and Tobago?

Governor Rambarran: Soon after its establishment in January 2007, the National Financial Literacy Programme (NFLP) commissioned a national financial literacy survey. The results pointed to certain financial inclusion challenges/issues such as only a modest percentage of the population with bank accounts; insufficient savings and a weak propensity to save; inadequate retirement planning; lack of understanding of basic financial products and services, and an overall relatively low financial literacy rate. In addition, the youth are not exposed to financial education as part of the school curricula.

The 2007 survey took place when Trinidad and Tobago was experiencing strong economic growth, increasing employment and rising incomes. Subsequently, Trinidad and Tobago has suffered from sub-par economic performance, which has undoubtedly forced lower and moderate income families to make some very difficult financial choices about budgeting, saving for emergencies and even postponing retirement.

AFI: How has the Central Bank of Trinidad and Tobago responded to the financial inclusion challenges of the country?

Governor Rambarran: The Central Bank has pioneered several initiatives to manage the financial inclusion challenges facing Trinidad and Tobago. The Office of the Banking Services Ombudsman was established in May 2003 to investigate complaints in respect of services provided by banks and their subsidiaries. In May 2005 the Office was expanded to include the handling of complaints from participating insurance companies and was renamed the Office of the Financial Services Ombudsman. The Ombudsman has been able to achieve an impressive 94 percent resolution rate for banking complaints and a 97 percent resolution rate for insurance complaints.

The consumer financial protection efforts of the Financial Services Ombudsman are complemented by the interventions of the National Financial Literacy Programme (NFLP), which was established in January 2007 and has been delivering relevant financial education programmes to members of the public. Both the FSO and NFLP have been reaching out to the population by going into their communities, workplaces, schools, etc., to address issues such as saving, budgeting, investing, financial services and products, entrepreneurship and retirement planning. We intend to intensify financial education interventions and programmes in the future.

AFI: There is a great variety of financial inclusion levels across the Caribbean, but are there also common challenges that the region faces?

Governor Rambarran: One common challenge facing the Caribbean region is the lack of rigorous, objective and reliable demand side data on how people save, borrow, make payments and manage risk. Only two countries in the Caribbean – Trinidad and Tobago and Haiti – are covered in the Global FINDEX database, which provides systematic indicators on financial inclusion in 150 countries. This information is important to more accurately diagnose the state of financial inclusion, identify existing barriers and craft appropriate policy responses.

AFI: What made you decide that the time was right to join AFI?

Governor Rambarran: The Central Bank views financial inclusion as a complement to its financial stability goals. The Bank is currently in the process of conducting a follow up national survey to determine whether there have been improvements in the level of financial literacy and inclusion in Trinidad and Tobago and to assess the impact of the NFLP interventions over the past five years. The findings will be used to direct our way forward and develop a financial inclusion policy. AFI provides an excellent opportunity for us to develop relationships with other countries and to leverage their knowledge and expertise to catalyze financial inclusion policy changes and to help push the global financial inclusion agenda.

AFI: You represent AFI 100th member of institution. What do you think the significance of AFI reaching 100 members means to global work of financial inclusion?

Governor Rambarran: This is a milestone for the AFI as yet another country has demonstrated its confidence in the network’s ability to assist in development of standards to guide financial inclusion practices in developing and emerging countries. Further with Trinidad and Tobago coming on board, this may serve as a catalyst for other Caribbean countries to join AFI, making the network a true and credible “Southern” voice on issues of global financial inclusion.

AFI: In your 2012 speech for the Caribbean conference on financial inclusion “From Agenda to Action,” you highlighted the importance of the Maya Declaration. What do you see as the main benefit of institutions adopting the Maya Declaration and making specific commitments?

Governor Rambarran: Adopting the Maya Declaration provides a benchmark against which citizens can assess the performance of policymakers in respect of their financial inclusion goals. Whether it is establishing a national financial inclusion policy, or creating a regulatory framework that balances financial inclusion, financial stability and financial integrity, or collecting financial inclusion data, policymakers are committing themselves to specific actions to dramatically improve the quality of their citizens lives, especially those who are most vulnerable and at risk. This makes policymakers even more accountable to their citizens.

AFI: At the end of May you will be taking part in the 2013 Annual Conference of the Caribbean Group of Banking Supervisors hosted by the Banque de la Republique of Haiti. What do you hope this meeting will achieve?

Governor Rambarran: As you may be aware, the January 2009 collapse of CL Financial and related companies in Trinidad and Tobago was a major financial shock across the Caribbean. The collapse had spillover impacts in many Caribbean countries, prompting costly government interventions. One key objective of our participation in the Caribbean Group of Banking Supervisors is to consider best practices in market conduct and regulation of complex financial conglomerates so as to prevent the re-occurrence of a similar financial crisis.

AFI: As you know the 2013 AFI Global Policy Forum will take place September 10-12 in Kula Lumpur, Malaysia. Will AFI 100th member be ready to make a Maya Declaration Commitment announcement?

Governor Rambarran: The intention is for the Central Bank of Trinidad and Tobago to make a Maya Declaration Commitment at the forum.

AFI: If you could see five years into the future, what area of financial inclusion do you think will be most relevant for Trinidad and Tobago and for the Caribbean region?

Governor Rambarran: As the recent global financial crisis and the CL Financial collapse harshly illustrate, consumers who can make informed decisions about financial products and services not only serve their own best interests, but collectively they can also help promote financial stability. Going forward, financial inclusion strategies in which consumers take responsibility for their financial future will therefore be the most relevant area for Trinidad and Tobago and the wider Caribbean region.