AFI working group members at the Working Group Convergence Meeting on 7 September 2021

8 September 2021

Working groups showcase policy models, demand-side surveys

AFI’s seven working groups met virtually on 7 September to showcase recent achievements and progress in fulfilling their 2021 goals, including the launch of 24 innovative knowledge products, an upgraded COVID-19 dashboard, a gender policy tracker and two upcoming policy models, and that Islamic finance for financial inclusion will become a new thematic area.

Nearly 250 participants from 61 countries attended the Working Group Convergence Meeting, during which Dr. Hannig drew attention to policy models on digital identity (ID) and electronic Know-Your-Customer (e-KYC), led by Global Standards Proportionality Working Group and the financing of micro, small and medium enterprises (MSMEs), led by SME Finance Working Group. Both are due to be presented at AFI’s annual general meeting on 8 September for approval by the membership.

AFI’s MSME Finance Policy Model will guide members on key elements in the development and review of MSME finance policies by collating and codifying knowledge products on different aspects of the MSME finance ecosystem. It has identified six comprehensive key pillars that can be adapted to the unique country contexts.

Meanwhile, its Policy Model on Digital ID and e-KYC aims to accelerate the use of formal financial services, particularly digital payments and other digital financial services, in line with global standards, including for anti-money laundering and countering the financing of terrorism. It provides financial policymakers and regulators with guidance based on successful codified approaches applied in AFI member institutions, as well as key lessons and best practices from within and beyond the network.

During his opening remarks, Dr. Hannig also spotlighted to shifting trends within the network, most notably the growing popularity of in-country implementation activities. These, he said, were yielding tangible improvements in financial inclusion policies and strategies.

“Members are now, more than ever, focusing their efforts on driving financial inclusion policies and strategies through hard evidence, including demand-side surveys,” said AFI Executive Director Dr. Alfred Hannig, citing members in Fiji, Kenya, Papua New Guinea, São Tomé e Príncipe and Uganda.

Working groups are an important source of policy development and trends in financial inclusion. They serve as platforms for knowledge exchanges and peer learning that allow policymakers to share, deliberate and deepen their knowledge and understanding of key financial inclusion issues.

Also taking the spotlight was AFI’s COVID-19 gender policy response tracker, which was launched in July and emphasizes the role of financial regulators in mitigating the growing threat of pandemic-induced financial exclusion for women. Despite some recent gains, the financial inclusion gender gap has stayed stuck at nine percent since 2011.

AFI’s latest tracker compliments its COVID-19 policy responses dashboard, which collates policy responses implemented by AFI members to address the challenges of COVID-19. COVID-19 has had a huge impact on policy changes within the network. Nearly 70 percent of the 137 policies and regulations reported by members in 2020 relating to the pandemic, mostly on debt restructurings, loan deferments and increased liquidity.

Dr. Hannig also announced that Islamic finance for financial inclusion would become the network’s newest thematic area. This expansion, he said, reflected Islamic finance’s “wide adoption within the network and importance as an alternative finance source for micro, small and medium enterprises (MSMEs),” a key topic of interest in emerging and developing economies.

Attendees also looked at planned activities for 2022 and gathered feedback on the direction of working group activities. Later in the session, participants were divided into groups to discuss central bank digital currencies, a guideline note on integrating inclusive green finance into national financial inclusion strategies and AFI’s two soon-to-be-published policy models.

First launched in 2010, working groups comprise over 400 participants, as of September 2021, the largest being Digital Financial Services Working Group with 68 members, followed by Consumer Empowerment and Market Conduct Working Group with 63 members. Together, they have developed 142 publications – including recent toolkits on national financial education strategies and digital financial literacy – and passed more than 530 policy changes in their respective jurisdictions.

Among the newest members of working groups were representatives from Ecuador’s Superintendencia de Bancos, which joined AFI as an associate member in June 2021.

The virtual event was held twice to allow for greater attendance among members in various time zones. It came a day ahead of AFI’s annual general meeting, an event designed exclusively for paid principal and associate member institutions.

AFI’s seven working groups are as follows:

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