AfPI experts encourage agent banking, financial education

Experts from AFI’s African Financial Inclusion Policy Initiative (AfPI) highlighted support for agent banking and financial education as priority emerging topics and challenges amid the ongoing COVID-19 outbreak. As key drivers of sustained access to digital financial services (DFS), especially for disadvantaged groups, they were focal discussion points during the 5th Meeting of AfPI’s Expert Group on Financial Inclusion Policy (EGFIP) on 19 May 2020, which kicked off a series of AFI’s virtual regional initiative events.

Agent banking, Bank Al-Maghrib’s Hakima El Alami said, is crucial to boosting access to bank accounts in remote areas across the African region and facilitating access to digital platforms. While this could, in turn, help revitalize sluggish economic activity, El Alami underscored the importance of building and maintaining relationships between institutions and target groups.

“If we want to promote digital financial services, then users must have trust in these services,” said Bank Al-Maghrib’s Hakima El Alami, who also chairs EGFIP, explaining that agent networks will require enhanced regulatory support, as well as complementary literacy drives designed to reduce consumer risks and encourage greater long-term use.

She added that financial inclusion provided a means of stemming expected financial and job losses, most notably in the informal sector.

“Leveraging our expertise with AFI staff seems to be more important than ever, especially to address the specific challenges of our regions, related to including women, youth and the rural populations as the most vulnerable segments,” she said.

Encouraged by physical distancing and regulatory easing, El Alami noted that member jurisdictions had seen significant rise in the use of digital channels.

Sharing Morocco’s experience, where e-commerce transactions increased by 30 percent, she explained that authorities were eager to transition away from cash-based transactions. However, she also noted that many immediate regulatory responses supporting this shift had been adopted as temporary measures aimed at mitigating the negative impacts of the pandemic and urged her peers to look at ways to ensure long-term viability.

Kuassi Satchivi from Banque Centrale des Etats de l’Afrique de l’Ouest (BCEAO) added that while the ongoing crisis had helped promote the use of economic payments among groups previously unwilling to adopt new practices, such developments must be accompanied by measures to protect consumers by raising awareness of digital risks.

“For regulators, I support efforts that address cybersecurity to avoid a digital virus five to 10 years [in the future], so we need digital infrastructure that is secure,” Satchivi said.

Also looking ahead was Aboubacar Keita from Banque Centrale de la Republique de Guinee, who endorsed calls for regulators to focus beyond the transitional measures adopted in response to the COVID-19 outbreak. According to the AFI dashboard, stimulus packages, loan restructuring and encouraging digital payment are among popular measures adopted by AfPI regulators in response to COVID-19.

“After this pandemic, we need to be able to find solutions to continue with measures we have put in place from this digitalization, because abandoning this new, temporary system would have a negative effect on financial inclusion,” Keita said.

Echoing this sentiment was Bank of Namibia’s Dr. Emma Haiyambo, who highlighted the need for greater awareness of threats, such as electronic fraud and scams.

“We can have all the facilities in place, but if we don’t educate consumers on their rights and obligations then our efforts become fruitless,” she said. Dr. Haiyambo also led a session on the planned AFI knowledge products relevant to the region, including reports and frameworks.

Ensuring that regulators are able to learn from and pass on best practices for the benefit of consumers, Sandra Bila from Banco de Mocambique expressed an interest in knowledge products on cybersecurity, digital financial education and measures that encourage agent networks.

Adding to the discussions was Central Bank of Egypt’s Mohamed Helmy who noted that AFI’s DFS Working Group was developing a knowledge product that responds to the global pandemic.

The importance of the financial inclusion gender gap was highlighted in planning, designing and implementing specific measures on future policies, particularly for COVID-19 responses.

AFI Deputy Executive Director Norbert Mumba pointed out that women were disproportionately impacted by the effects of COVID-19, as many were employed in micro, small and medium enterprises (MSME).

“Having a gender lens is going to be key to the recovery process for most of our countries in the region,” Mumba said, emphasizing that gender components must be amply reflected in the design of interventions.

Ivan James Ssettimba, the head AFI’s Africa Regional Office, noted that one of policy framework for enhancing the MSME financing ecosystem in the African region for women is being developed. He told participants highlighting that the region was committed to providing guidance and facilitating effective access to finance for women-owned MSMEs.

Around 30 people took part in the virtual event aimed at agreeing on a shortlist of specific regional COVID-19 financial inclusion policy response recommendations for the next meeting of AfPI Leaders, as well as AFI’s assistance in supporting these efforts.

AfPI is the primary platform for AFI’s African members to support and develop financial inclusion policy and regulatory frameworks in Africa, and to coordinate regional peer learning efforts.

As a subgroup of AfPI, EGFIP comprises of senior officials who provide insight on policy and regulatory approaches to help address pressing regional and sub-regional challenges of enhancing financial inclusion in Africa. It is comprised of members from Bank Al-Maghrib, Bank of Mozambique, Bank of Namibia, Bank of Tanzania, Banque Centrale de la Republique de Guinee, Central Bank of Egypt, Central Bank of Kenya, BCEAO, Central Bank of Liberia and Central Bank of Sao Tome e Principe.

The regional initiative is partially financed through AFI’s Multi-Donor Financial Inclusion Policy Implementation Facility (MD-PIF), with participation of French Development Agency (AFD), the German Federal Ministry of Economic Cooperation and Development (BMZ) and the Ministry of Finance of the Grand Duchy of Luxembourg.