21 November 2016
The city of Cartagena de Indias, Colombia, was witness to financial inclusion history last week with the launch of the Financial Inclusion Initiative for Latin America and the Caribbean, or FILAC. The launch was part of two-day event that took place from 15-16 November 2016, organized by the Alliance for Financial Inclusion (AFI) with support of the International Development Research Center (IDRC).
Held under the theme of “Partnerships for Prosperity: Working Together for Inclusive Growth”, the event was attended by more than 70 participants from AFI member institutions, partners and stakeholders from across the region. Besides the official launch of FILAC, the forum provided an opportunity to discuss ways to refine AFI’s regional peer-learning platform priorities, generate new knowledge exchange opportunities, and advance the overall financial inclusion agenda in the region.
Alfred Hannig, AFI’s Executive Director, delivered the opening remarks, highlighting the financial inclusion achievements of the region and recognizing the efforts that had been made to make FILAC a reality. “A regional initiative for LAC was not a matter of if- it was just matter of when. Thanks to the dedication of our members and the proactive involvement of the International Development Research Centre (IDRC) of Canada we are now in the position to launch FILAC and help accelerate financial inclusion efforts across the region”.
Ms. Carolina Robino, Senior Program Officer for IDRC, addressed the participants, expressing her delight over the partnership with AFI on FILAC. “Fostering financial inclusion fits naturally as one of IDRCs areas of interest. Our partnership with AFI will connect researchers and policymakers for foster large scale positive change.”
Participants discussed a wide range of financial inclusion topics over the two days of meetings. Plenary sessions were held on financial inclusion strategies and vision for FILACs work in the region, current challenges and opportunities, the role of digital finance, and how to address the financial inclusion gender gap. Breakout sessions were also organized to explore in more detail issues common to the LAC region and which should be priority areas for FILAC.
“A Vision of Greater Financial Inclusion in Latin-America and the Caribbean” session, saw high-level leaders representing the three sub-regions of LAC sharing views on the new initiative, its purpose, the challenges and concerns from the region, and workplan priorities. Panelists examined the commonalities, lessons and potential synergies within the LAC sub-regions and highlighted the benefits that cooperation through FILAC could bring to the AFI membership.
A presentation entitled “LAC Snapshot: Policy Needs, Challenges and Opportunities” showcased regional data available from the AFI Data Portal, the AFI M&E results and the Global Findex (2014) which provided an overview of the status of financial inclusion policies in the LAC region. The presentation demonstrated not only the high level of LAC member engagement, but also the opportunity for them to reach more vulnerable groups. Specifically, digital financial services was identified as having potential opportunity for growth, while data, interoperability, financial literacy and consumer empowerments, were identified as regional priorities.
Participants were further provided an overview of the 2016 GPF discussions regarding FILAC, including decisions on governance and structure made by members in attendance. Following this, a high-level perspective of the specific topics on which the LAC initiative will be focused on was discussed. It was suggested that partnerships with academic and research institutions would be beneficial, especially in areas that are quite challenging for the region such as interoperability, regional price data, gender access and price discrimination, and lack of regional data, all of which could be part of FILAC’s potential workstreams.
“Addressing the Gender Gap in Latin America and the Caribbean”, was one of the events highlights where discussants suggested that policies should use national information databases to assess bottlenecks on access and usage of financial services for women. It was also emphasized that financial education should be driven by public sector, and that that practical concepts and innovative delivery methods should be considered. The benefits of sex-disaggregated data were discussed with a general agreement that too little of this information is available. The Central Bank of Haiti representative shared that while the bank collects data, it had never collected gender disaggregated data. However, after joining AFI and in formulating NFIS, it realized that to be more efficient, given limited resources, gender data would be extremely important.
The final plenary session, “DFS in Latin America & Caribbean: Connecting people”, surveyed the different models currently in use to support digital financial services. Mr. Jorge Ortega, Financial Inclusion ALC at Visa, stated that “Visa is aware that technology allows the development of new means of payments that can drive a change on customer’s behavior”. When asked about to what extend telecommunication operators have played a role on each sub-region, Mr. Marcelo Licht, AVP Americas, TransferTo, noted that “financial education and clear regulations are quite important to expand DFS”. Professor Schydlowsky, emphasized that “digital money is the greatest innovation in the last 200 years”, stressing how this service needs to be adjusted to the needs of people.
The closing session of the forum provided participants with a more detailed outline of the initiative. FILAC’s foundation document, the “Cartagena de Indias Consensus”, was endorsed, setting the framework for FILAC’s coordination within AFI and with AFI’s partners. The document laid out FILAC’s main priority areas for the region, including Digital Financial Services, Data, Women’s Financial Inclusion and Consumer Empowerment and Financial Literacy. In addition, a Leaders Roundtable was established with Banco Central do Brasil Chair announced as the first Chair. Two Co- Chairs were also selected with Superintendencia General de Entidades Financieras de Costa Rica (SUGEF) and Banque de la République d’Haiti, taking up these important seats.
FILAC is now set to take its place alongside other AFI initiatives such as AMPI and PIRI, as a regional driving force for the advancement of financial inclusion. Participants were excited over the potential of the initiative and appreciative of the efforts being made by AFI and IDRC. As noted by Mr. Luis Carlos Delgado, President, National Council of the Financial System Supervision (CONASSIF) and member of the AFI Board, “the strategic alliance between IDRC and AFI will ineludibly contribute to the development of capacities of Latin America and Caribbean population. These capacities will be encouraged by allowing people to have access to financial markets and to financial instruments such as savings, credit, insurance, education loans, and others. In this sense, the FILAC alliance will serve as an engine of economic growth and poverty reduction in the LAC region, while making financial services accessible in a meaningful and sustained way”.