FOR IMMEDIATE RELEASE / PARA PUBLICACIÓN INMEDIATA
SAN SALVADOR/KUALA LUMPUR (11 March 2021) – Banco Central de Reserva de El Salvador (BCR) and the Alliance for Financial Inclusion (AFI) co-hosted a joint meeting to strengthen policy discussions on quality content, deepen capacity among members and find synergies on thematic topics between the working groups on 9-10 March 2021.
The virtual event saw members from across AFI’s diverse network of central banks, finance ministries and other financial regulators take part in the 21st Consumer Empowerment and Market Conduct Working Group (CEMCWG) Virtual Meeting and the 13th Global Standards Proportionality Working Group (GSPWG) Virtual Meeting.
“Financial inclusion is essential to integrate the unbanked population into the formal economy. It contributes to a reduction in poverty levels and existing economic inequalities,” said BCR President Douglas Pablo Rodríguez Fuentes.
“The health crisis has completely changed the landscape, causing financial authorities and different agencies around the world to begin rethinking their priorities and agendas,” said BCR’s Rodríguez Fuentes. “As a central bank, we are convinced that the adoption of international standards is necessary for market management, through the implementation of mechanisms that allow entities to deal with potential crisis situations, but also to consolidate the construction of regional financial centers.”
In the past year, the country has seen the implementation of two key measures targeting greater financial inclusion. Firstly, the National Financial Inclusion Policy aims to promote an inclusive financial system, with an emphasis on traditionally excluded populations, such as lower-income people, women and micro and small businesses. From this policy came the development of the National Financial Education Strategy, which enables the prioritization efforts to improve the financial capacities of the population.
Since joining the network in June 2012, BCR has played an active role in all seven working groups. The central reserve bank has also been instrumental in driving financial inclusion in the Latin America and the Caribbean, through the AFI network’s Financial Inclusion Initiative for Latin America and the Caribbean.
Over the past year, there has been a rise in the access and usage of financial products and services across the region, as movement restrictions linked to COVID-19 led millions to open accounts or use digital and electronic commerce platforms for the first time.
While the growth of digitalization represents an important evolution in economic development, it also brings challenges and risks that could slow the integration of institutions and individuals into the financial system, especially vulnerable groups such as women, migrants, forcibly displaced persons, youth, elderly people and small businesses.
It is therefore vital that financial authorities design measures to mitigate the impact on these vulnerable groups and increase resilience to crises such as the one we are currently experiencing.
“As we begin our journey in 2021, we must continue to remain focused in crafting the right policy intervention and aligning our perspective as the reality is still that 1.7 billion people are financially excluded and we still have a gender gap on access to financial services,” AFI Deputy Executive Director Norbert Mumba said.
“It is essential to strengthen the regulatory framework for consumer protection particularly redress mechanisms, improve cybersecurity and biometric identification measures, as well as design and implement financial education programs to prevent problems such as identity theft, fraud, illicit financial flows and money laundering,” AFI’s Mumba said.
Despite the challenges of last year, AFI members reported 141 new policy improvements that were informed by engagement with AFI, including 34 related to digital financial services – such as FinTech, electronic money and national payment systems – and four related to gender inclusive finance. AFI also successfully delivered 18 capacity building events, attended by over 1,300 policymakers from across the global network.
Crucially, in 2020, CEMCWG developed the Policy Model on Consumer Protection for DFS that responds to the fast-paced growth of digital financial services and the accompanying risks to consumer protection. In addition, GSPWG developed the Inclusive Financial Integrity: A Toolkit for Policymakers to support members in aligning the goals of financial integrity and financial inclusion. It assists them with practical guidance and examples to ensure that the global standards on anti-money laundering and countering terrorist financing can be successfully implemented without giving rise to unintended consequences for financial inclusion.
Through this week’s two-day gathering – the first in a series of joint working group meeting for 2021 –, members of CEMCWG and GSPWG generated practical thought leadership and regulatory guidance on critical and unresolved policy issues.
Senior representatives from BCR and other key stakeholders also presented major initiatives to advance financial inclusion in El Salvador. This was followed by updates and technical presentations on related financial inclusion topics such as COVID-19 responses and digital innovations. Participants also explored AFI’s Youth Financial Inclusion Policy Framework, including policy actions on consumer protection and overcoming KYC hurdles. AFI working groups also appointed new gender focal points.
It came shortly after leaders from all seven of AFI’s working groups gathered via live feed on 2 March 2021 to discuss recent achievements and lessons learnt, planned activities for the year ahead and provide strategy updates.
AFI’s working groups are the key source of policy development and trends in financial inclusion and serve as “communities of practice” on key financial inclusion issues. They are the primary mechanism for generating and hosting knowledge within the AFI network and provide a platform for knowledge exchanges and peer learning that allow policymakers to share, deliberate and deepen their knowledge and understanding of key financial inclusion issues.
Virtual gatherings with the network’s remaining five working groups are scheduled to be held in the coming weeks. Joint meetings with AFI’s Financial Inclusion Data Working Group and SME Finance Working Group will be co-hosted by Reserve Bank of Vanuatu on 16-17 March 2021. Bank of Ghana will then co-host the Digital Financial Services Working Group, Inclusive Green Finance Working Group and Financial Inclusion Strategy Peer Learning Group on 23-24 March 2021.
Headquartered in San Salvador Banco Central de Reserva de El Salvador joined AFI in June 2012 and is a principal member. Among its completed Maya Declaration targets is the issuance of regulation on mobile financial services and defining indicators that measure the progress of financial inclusion. Founded in 1934, the country’s central reserve bank is responsible for promoting transparency in the financial system and management of financial resources. The bank’s functions include maintaining currency and economic stability by monitoring monetary, exchange, credit and financial conditions. www.bcr.gob.sv
AFI is the world’s leading organization on financial inclusion policy and regulation. Currently, 100 member institutions make up the AFI network including central banks, ministries of finance and other financial policymaking or regulatory institutions from 88 developing countries and emerging markets. AFI empowers policymakers to increase the access and usage of quality financial services for the underserved through sustainable and inclusive policies and an effective use of digital technologies. www.afi-global.org