Ladies and Gentlemen,
Good day to all of you!
A very warm welcome to all for this BCEAO-AFI Virtual Member Training on Policies Supporting MSME Financing. I am sure this topic is currently of high relevance for each member institution, and hope the training will lead to new learnings to enact smart policies for MSMEs in the face of continuing unpredictable times.
First and foremost, let me extend my appreciation to our co-host BCEAO. The BCEAO has always been at the forefront of promoting knowledge sharing in the network. It has extensively shared its expertise at different policy leadership and capacity building events on a wide-ranging issue such as gender inclusive finance, interoperability among others. In addition, the BCEAO is widely acknowledged for undertaking smart policies amid the crisis which have resulted in positive economic growth of the region.
A particular forum that I remember is the 3rd Annual African Mobile Phone Financial Services Policy Initiative (AMPI), now called AfPI, held in July 2015 in Yamoussoukro, Côte d’Ivoire. Governor Kone’s was the Chair of AMPI and he stressed the need to focus on the strategic vision of AMPI, suggested a stronger physical presence in Africa and highlighted the policy focus areas. He has also played a key role in bringing in focus on gender inclusive finance in AFI. We now see many of these ideas in implementation and reaping effective results.
Policy Model for MSME Finance
In furthering our commitment for MSME Finance, the AFI’s Membership Council recently endorsed the Policy Model for MSME Finance in its 6th Annual General Meeting held last month. The Policy Model provides a comprehensive guidance for our member institutions to review their current policies, identify policy gaps and accordingly formulate new/modify existing policies to address the barriers of MSME finance.
The six pillars of the policy model – Legal and Regulatory Infrastructure, MSME Finance Policy, Credit Infrastructure, Alternative Finance Infrastructure, Market Efficiency and Priority Sectors – are derived from the compilation of best practices from the AFI network, complemented by insights from other international stakeholders in MSME development. These six pillars have been developed keeping in mind the fundamental challenges faced by small businesses while seeking formal financing avenues. Each pillar of the policy model endorses generic principles of MSME financing that can be easily adopted by policy makers according to the unique needs of their jurisdictions.
The training is designed to help you develop action plans that enable improved access to finance for MSMEs in your jurisdictions especially for vulnerable groups such as women and youth owned MSMEs as well as MSMEs vulnerable to climate change risks. I would encourage you to put the Policy Model into practice as relevant to your respective jurisdictions especially Pillar 3 that highlights the importance of credit infrastructure as the enabler to access to finance for MSMEs. A leading example of improved credit infrastructure is the reforms implemented by Ghana’s movable collateral legal framework and registry, which benefited more than 100 local MSMEs to access finance and helped create hundreds of new jobs.
Policies to Support Women-led/owned MSMEs
Women-led MSMEs are crucial for economic prosperity, however, they face varied challenges as compared to men and policies considerate of their unique needs are essential to increase their access to productive assets and productivity. As stated in the AFI’s Policy Framework for Women-led MSME Access to Finance, a sizeable number of countries still have regulatory barriers that impede access to finance for women-led MSMEs and informal enterprises. A large number of 100 economies still prevent women from operating in certain sectors and/or from working outside their home.
Within this context, policy and regulatory interventions become imminent to design gender sensitive and gender transformative policies creating sustainable regulatory environment for women-led MSMEs and women entrepreneurs to flourish. This policy framework can be integrated into national financial inclusion strategies and other policy initiatives to address the unmet financial requirements of women entrepreneurs.
BCEAO’s Work to Support MSMEs
As I said, we are privileged to have BCEAO as our co-host particularly for this training. In the face of devastating financial crisis ensued by COVID-19 BCEAO implemented strong monetary policies, which safeguarded the interest of small businesses across the region allowing them to weather the difficult times with resilience and fortitude. BCEAO’s Support Facility for SME/SMI financing is a one-of-its kind regional initiative that brings all members to work towards creating an enabling ecosystem for MSMEs access to finance. The Support Facility promotes a unified approach to tackle the problems of MSME sector. We will benefit greatly by BCEAO share its experiences on this mechanism and the implementation of the Facility across member countries. This platform will also give an opportunity for member states of BCEAO to present concrete examples of its implementation and in turn learn from the experiences of participating member institutions. It will also bring in private sector players to understand perspectives and challenges faced by the industry.
Role of AFI
Over the years, AFI has played a critical role in strengthening financial inclusion policy leadership, propagating good practices among AFI network, and supporting the members through policy implementation. In this journey, AFI has collaborated with other regulators, international organizations and private sector leaders advancing the cause of financial inclusion through its seven thematic policy areas. Built on peer learning model, AFI has developed a rich repository of policy guidelines and toolkits facilitating in-country implementation. Till date, AFI member institutions have implemented over 800 policy changes since the organization was established in 2009, leading to financial inclusion of over 630 million people globally.
We believe, continuous knowledge sharing and capacity building efforts are vital for peer transformation and robust implement of policies at country-level. On this note, once again, I welcome you to actively participate in the training and apply the learning in your jurisdiction. AFI’s mission is to empower policymakers with critical knowledge to develop and implement concrete policy reforms achieving financial inclusion goals and reviving MSME sector post-pandemic is one top priority for the network to bring back the economy on track.
With this, I welcome you all to a very fruitful next three days.
All the best.
© Alliance for Financial Inclusion 2009-2023