By Taty Azman, Policy Analyst and Luis Trevino, Senior Policy Manager, AFI
AFI’s Financial Inclusion Data Working Group (FIDWG) has forged the network’s path to develop a common framework that harnesses data to accurately track and assess the access, usage and quality of financial inclusion policy interventions and regulations.
At its core lies the AFI Core Set Policy Model, published late last year as a set of indicators that guide regulators and policymakers in collecting data on the main dimensions of financial inclusion and developing national policies. Nearly a decade in the making, the knowledge product’s ongoing success lies is in its use by both AFI members and institutions outside the network whose application defines and formulates baseline and target indicators for financial inclusion policies and national strategies . Roughly half of AFI members have reported developing data measurement policies that incorporate the Core Set indicators.
This cornerstone publication appeared in its earliest form in 2011 as a core set of financial inclusion indicators, FIDWG’s first tool for guiding quantitative data collection and measurements in the access and usage of financial services. From an original five indicators, a further 55 were later added in response to member needs to define the quality of financial inclusion, and add access, usage and quality indicator focusing on small and medium-sized enterprises, mobile financial services and digital financial services.
Demand for greater analytics also yielded tools to increase segmentation and address challenges relating to gender equity, climate change, financial needs and resilience. Among them is a toolkit that leverages sex-disaggregated data as a critical segmentation process to measure women and men’s financial inclusion and identify opportunities to bridge the gender gap . Most AFI members have since reported collecting some form of sex-disaggregated data including Bank of Zambia, which, in early 2019, committed to developing and advocating best practices in collecting, analyzing and using sex-disaggregated data to further promote financial inclusion for women.
But FIDWG’s pivotal status in the network was cemented long before, most notably with the 2013 Sasana Accord that expressly commits financial inclusion policymaking and strategies to evidence- and data-based results and contributes to accelerated progress and the measurement of its impact. These assurances have culminated in 104 Maya Declarations and 86 country policy changes on data and measurement adopted to date.
In building a common data framework, FIDWG also accelerated the development and implementation of tools to support AFI members in gathering and harnessing data to measure financial inclusion from the demand side – including through surveys – and supply side – including data collection from regulated financial institutions.
Since the beginning, demand-side data has been deemed critical for informing policymaker responses to financial inclusion challenges faced by unserved and underserved populations. As a result, some of FIDWG’s first knowledge products outlined key steps to conduct successful demand-side surveys for financial inclusion measurements based on the experiences of members. Across the network, AFI members have used this publication to guide their own demand-side surveys including members in Fiji, El Salvador, Uganda and Senegal.
For the supply side, FIDWG’s focus on different dimensions gave rise to a guideline note on geospatial mapping, a practical framework to measure the location of financial access points. Any resulting data could then be compared against various socio-demographic and financial market data to identify market and policy gaps as well as opportunities to expand financial services outreach.
FIDWG continues to support these efforts through peer reviews and knowledge exchanges. Strong members ties form the backbone of the working group, forged through practical expertise and technical knowledge that embraces peer-to-peer learning and the bottom-up approach that defines the network’s interests and priorities. Each year, an array of peer reviews from and for FIDWG members support different policy measurement projects through practical solutions.
Capturing the expertise of a wide variety of stakeholders, FIDWG frequently collaborates with likeminded partner institutions. Teaming up with Global Partnership for Financial Inclusion, for example, led to several country case studies – including Bangladesh, Burundi, Mexico, Peru, Philippines and South Africa – that helped strengthen financial inclusion indicators.
More recently, cooperation with Cenfri/insight2impact led to a conceptual framework on a client needs-centered approach to financial inclusion measurement that allows for the development of innovative approaches in the uptake and usage of financial services. Meanwhile, ties with Data2X targeted sex-disaggregated data as a means to close the financial inclusion gender gap and promote women’s financial inclusion. It identified market opportunities for women and established targets for them that have enriched the discussion and development of new models to measure financial inclusion.
Despite making huge strides, many critical challenges remain. Financial inclusion measurements must now evolve beyond access and usage only. Reflecting financial needs and health approach, financial inclusion measurements should shift attention towards the quality and sustainability of financial services. At the same time, more emphasis must be placed on incorporating vulnerable groups, such as women, youth and small businesses, as essential components in datasets.
Given the recent challenges of COVID-19, a shift towards sustainable techniques for demand-side data collection (e.g. telephone surveys) and additional emphasis on supply-side data analytics (e.g. transactional data) will drive the way financial inclusion will be measured in the near future. We encourage our network members to keep on using the AFI Core Set and the array of AFI knowledge products and resources available to measure and track the financial inclusion policies they have implemented. More is to come from FIDWG, and we are excited to venture the road ahead with you!