7 September 2021
Good morning, good afternoon and welcome to the Working Group Convergence Meeting. Allow me to express my gratitude by thanking everyone for taking the time to attend our proceedings today.
It is encouraging to see so many of you present, despite prevailing global circumstances. While I would have loved to greet you in person, I extend the same level of warmth and spirit of camaraderie to all as we meet virtually. We hope for physical meetings soon!
Let me start by sharing some news about the position and outlook of our alliance. While we recognize that the global pandemic continues to present shocks that many could not have foreseen, they also reminded us daily of humanity’s resilience in its abilities and capabilities.
We continue to innovate and birth fresh and creative ideas in these most difficult circumstances, from which the impacts grow exponentially when network effect is applied. I am excited to report that this has been the experience of the AFI network.
Before I begin sharing the achievements of the working groups, please join me in welcoming our newest member of the AFI working groups, Superintendencia de Bancos del Ecuador. To their representatives present, a warm welcome to the AFI working groups!
Allow me to draw attention to some of our achievements from 2021. In the first half of the year, we harnessed digital means to host seven working group management meetings and two technical webinars that centered discussions on COVID-19 policy responses. Collectively, we have developed an enviable 20 knowledge products and four special reports.
This year, in line with AFI’s Phase III (2019-2023 Strategic Theme: Policy Leadership Alliance), two new policy models – which were developed with tremendous support from the working groups – will be put forward at tomorrow’s Annual General Meeting. They are:
Despite these achievements, the stark reality is that 1.7 billion people remain financially excluded, and that the gender gap has stayed stuck at 9 percent since 2011. While the pandemic has exacerbated existing gender inequalities, there remains hope. Our AFI COVID-19 Policy Response Dashboard found that financial regulators and policymakers have seized opportunities to address these imbalances through gender-sensitive and gender-transformative policies. This is also aligned with the network’s commitments in the Denarau Action Plan and Kigali Statement.
I am also pleased to share that we recently launched a COVID-19 gender policy response tracker that looks at regulatory responses implemented at the national level across AFI member jurisdictions. The tracker categorizes policy responses into four key pillars: women & regulation, women & MSMEs, women & social protection, and women & digital financial services.
COVID-19 has influenced most policy changes within the network. Close to 70 percent of the 137 policies and regulations reported by members in the AFI Policy Response Survey 2020 were COVID-19 related, with provisions made on debt restructurings, loan deferments, increased liquidity, among others.
Even so, the pandemic has had a negative impact on women and youth with high unemployment leading to increased levels of poverty. Acknowledging this, women, youth & small businesses were at the top of our Africa leaders’ agenda during a series of forums held in August 2021 as part of the 8th African Financial Inclusion Policy Initiative (AfPI). Complimenting this are AFI’s Youth Financial Inclusion Policy Framework and Guideline Note on Integrating Youth Into A National Financial Inclusion Strategy, which provide policy guidance to advance this emerging financial inclusion agenda.
In the AFI Policy Response Survey 2020, it was clear that policy responses were mainly targeted at the micro, small and medium enterprise (MSME) sector. Strengthening the sector’s recovery will require increased effort and support from AFI to members and our goal is that the MSME Finance Policy Model and 20 knowledge products on this theme will provide sufficient policy guidance.
Dear members, we have observed an emerging financial inclusion policy topic that addresses MSME finance, which is that is being practiced in both developed and developing countries. In this regard, I am pleased to share that we will be formalizing Islamic finance for financial inclusion as our newest thematic area, prioritized by AFI, reflecting its wide adoption within the network and importance as an alternative finance source for MSMEs.
Several AFI members have also implemented policy changes to accelerate financial literacy in their jurisdictions in 2020 through the development and implementation of financial literacy frameworks and national strategies. Some members have also launched targeted financial literacy interventions in the context of COVID-19. In this regard, the recently published AFI Financial Digital Financial Literacy Toolkit and AFI National Financial Education Strategies Toolkit by the CEMCWG and DFSWG provide practical guidance to members on this emerging policy area.
This topic is especially important to the transformation of refugee livelihoods, and we encourage the inclusion of forcibly displaces persons into the financial literacy strategy lifecycle and other financial inclusion strategies. Having this group included in key policy conversations is pivotal to their financial inclusion, as exemplified by the Bank of Uganda in their development of the Strategy for Financial Literacy in Uganda, a five-year plan that gives attention to targeted vulnerable groups, including Uganda’s sizeable refugee population.
The development of last-mile solutions extends to digital financial services, which offer essential opportunities for the significant and rapid expansion of access to formal financial services. This is especially crucial amid COVID-19, where the speed and scale of delivering response solutions to all can mitigate the potential impact of economic shocks on vulnerable groups. On this front, AFI, through our in-country implementation (ICI) activities, successfully assisted the Central Bank of Nigeria with their National FinTech Strategy, which was launched in June 2021, as well as the Banco de Moçambique with the development of tiered KYC and fintech regulatory framework from August 2021. Congratulations to both our members!
Members are now, more than ever, focusing their efforts on driving financial inclusion policies and strategies through hard evidence. In this regard, demand-side surveys to inform achievements from previous strategies and to establish baselines for upcoming policies were undertaken in the Pacific region by the Reserve Bank of Fiji and the Bank of Papua New Guinea. In Sub-Saharan Africa, we see that the Bank of Uganda and the Central Bank of Kenya are implementing the similar measures after knowledge and peer learning opportunities from the AFI Financial Inclusion Data Working Group (FIDWG). This key aspect of the AFI network has contributed to tangible improvements in national financial inclusion strategies, such as São Tomé & Príncipe’s first NFIS 2021-2025, which includes inclusive green finance policies, and a mid-term review of Uganda’s NFIS 2017-2022.
A growing theme within the financial inclusion policy landscape is inclusive green finance policy leadership and regulatory guidance on how financial regulation can include disadvantaged individuals and MSMEs in climate mitigation and resilience efforts. Among those leading the way is Banco Central de São Tomé e Príncipe, which carried out a survey of MSMEs and large companies to assess the main effects of the pandemic and inform future policies. Elsewhere, members in Bhutan and Mongolia have developed green finance policies including green taxonomy and green lending for MSMEs. Here, I would like to emphasize that the IGFWG is moving steadily away from solely issuing policy guidance to assisting AFI members with practical and implementable policies that address climate change.
To further support members in achieving inclusive financial integrity, AFI has collated and channeled perspectives from across the membership into the Financial Action Task Force (FATF) Presidency’s initiative to address unintended consequences arising from the implementation of the FATF standards. FATF is expected to publish its report on the matter in October. Additionally, there has been a strong trend towards global standard-setting bodies (SSBs) incorporating climate change risks into their work plans and financial stability frameworks. AFI is supporting structured dialogue with SSBs on the intersection between climate risks, financial stability, and financial inclusion by hosting of the G24-AFI Roundtable on this theme in spring 2022 and establishing a new joint GSPWG-IGFWG subgroup to develop guidance and promote joint dialogue with the SSBs.
An important objective of AFI’s management unit is to ensure that it meets the needs and aspirations of its members. Hence, this year we have taken steps to implement your recommendations received during the first quarter’s working group meetings. This will be reflected in this week’s meetings, and we look forward to extensive deliberations from members.
Over the years, you have worked hard within your working groups to deliver important knowledge products for the benefit of members. We acknowledge that though this represents one of our core strengths as an organization, we are yet to actualize the impact of these rich policy resources. Our definition of impact for these knowledge products should move beyond visibility in the media and industry and apply to within our jurisdiction.
As part of our AFI Phase III Strategy: Policy Leadership Alliance, the AFI management unit has therefore initiated several interventions, under our working group strategy, aimed at deepening the usage of knowledge products at the country level. These include building synergies between our ICI service and core publications, such as policy models. We are hopeful that this will enhance the relevance and usage of our deliverables while also facilitating the development of national technical capacities on financial inclusion.
In line with our AFI Phase III agenda, which calls on the expansion of in-country implementation, we intend to leverage the vast expertise found within the network to support members. Individuals and institutions that make their expertise available for the benefit of others will be duly recognized.
Cherished members, these interventions are indeed exciting and will be transformative for the network and advance financial inclusion within our jurisdictions. Nonetheless, this can only be possible with support from you – our members.
Thus, I want to encourage everyone to come on board to make these proposals a reality. You will have the opportunity to discuss them at length in the forums we have planned for the remainder of 2021. They include this month’s Policy Leadership Dialogue, seven working group management meetings and the proposed Working Group Leadership Meeting in Q4 2021.
I am confident that we will receive your immense support. I would like to thank you in advance for all your efforts going forward. Alone we can do so little; together we can do so much.