Joint Learning Programme on Digital Financial Services – Opening Remarks by AFI Deputy Executive Director, Norbert Mumba

Joint Learning Programme on Digital Financial Services,
Organized by AFI in collaboration with Bangladesh Bank
Monday, 4 December, 2017
Dhaka, Bangladesh

Opening Remarks by Norbert Mumba, Deputy Executive Director, AFI

Chief Guest – Mr. S. K. Sur Chowdhury, Deputy Governor, Bangladesh Bank,

Welcome Address – Mr. Md. Abdur Rahim, Executive Director, Bangladesh Bank,

Colleagues from Bangladesh Bank,

Participants from AFI member institutions,

A special welcome to those who are attending an AFI event for the first time, hope it will be great journey for learning for you,

AFI team,

Welcome to the Joint Learning Programme on Digital Financial Services with a focus on promotion of financial inclusion — a joint collaboration of Bangladesh Bank and the Alliance for Financial Inclusion.

Bangladesh Bank has been a very active member in the AFI network, taking up several leadership/governance roles and presently the Co-chair of the AFI Board. Other roles played by BB are:

• Member and now Vice Chair of the Board
• Member of the Global Standards & Policy Committee
• Co-Chair and Gender focal point for the GSPWG
• Active members in all 6 working groups

We also have the Microcredit Regulatory Authority, Bangladesh as an Associate Member in the network, who is also an active member and regular contributor in the AFI network.

The Ministry of Finance is another Associate Member from Bangladesh.

So, it is our great pleasure to hold our first ever event in Bangladesh which will further strengthen the partnership of BB and AFI. This JLP brings together 33 participants from Africa, Asia and Latin America and the Caribbean representing 22 countries and 24 institutions for a great week of learning.

Capacity Building events of AFI have been rated as one of the most useful services offered by AFI and about 50% of our events fall under capacity building category. Every year we have more than 20 capacity building events, which includes Joint Learning Programmes, Member Trainings, Trainings with AFI’s Public Private Dialogue partners, and the Peer Advisory Service – each of them attended by a diverse range of participants from across AFI’s membership. The demand for capacity building is on the increase and this year we have gone a step ahead and launched the online course – The Certified Expert in Financial Inclusion Policy – CEFI in partnership with Frankfurt School of Finance and Management.

AFI’s approach to capacity building has been to nurture through peer learning and Joint Learning Programmes or JLP have a played a special role in this regard.  A JLP is led by a country which has made significant progress in financial inclusion, especially on a particular theme, but it also provides the opportunity for other member institutions to share their models and achievements. And the diversity of the participants provides the ideal learning ground in a JLP to learn the best of various models, the challenges of various models, the learnings from various models. Thus, a JLP gives participant AFI members the opportunity to gain in depth knowledge on the topic and adapt it for their own country.

It has been proven beyond doubt globally that Digital Financial Services (DFS) is a key catalyst to achieve the objectives of financial inclusion, and in turn contribute more broadly to the achievement of the Sustainable Development Goals (SDGs) agreed by the global community in 2015. The rapid changes that DFS sector is witnessing -entry and involvement of multiple players and the role of demographics or the market – makes it very challenging for financial regulators to keep themselves updated and stay ahead of the curve It is also incumbent open us to ensure that the rapid growth of DFS does not leave anyone behind and is benefitting all, including closing the gender gap in financial inclusion, and by providing access to particularly vulnerable groups including youth, those with disabilities, and migrants.

AFI works in six core policy areas and the growing importance of DFS and opportunities it offers in innovations has made it of relevance across all the six areas – whether it is using digital options for financing of MSMEs, or enhancing financial capabilities of end users for digital financial services, or reducing the gender gap in financial inclusion. At the same time, innovations in DFS bring along with new risks and challenges in relation to balancing access and usage with financial stability and integrity. These factors contribute to high demand for capacity building in the area of DFS.

AFI member institutions in this room represent diversity. Diversity in more obvious terms related to the geography and cultures that you represent. And diversity in terms of various aspects of DFS. Let me give some examples here:

• Stage of deployment: DFS deployments in your countries are at various stages of deployment such as early, growth and maturity.
• Business model: DFS is your countries is led by banks, telco’s, non-bank providers or even start-ups in some cases
• Type of account: DFS is provided through an e-money account or a deposit account
• Distribution channels: DFS is offered through individual or institutional agents, ATMs, web etc
• Transaction medium: DFS transactions happen through basic mobile phones via USSD or SMS, smart phone applications, tablets, POS, online etc.,
• However – despite all the diversity, there is a common objective of ensuring ‘integrity, stability and protection of consumers’ that unites us regulators.

Bangladesh has been a pioneer in microfinance, and has shown the world how it can effectively be a core pillar for financial inclusion. Further, within a very short period, the country has emerged as a leader in mobile financial services through enabling regulatory environment that led to market innovations. Today, a player like bKash – with 24 million users, which is 15% of the population of Bangladesh – has rivalled the growth of MPesa in Kenya. With such a rapid growth, issues related to money laundering, terrorism financing and cyber security also become prominent – requiring the regulator as well as market players to come up with risk management/mitigation measures.

We are also pleased to welcome speakers who have joined us from other member institutions of AFI who will also share their own perspectives and experiences this week on the key ingredients for an enabling environment for digital financial services to flourish.

Which brings us to the  overall objective of this training which is to ensure that AFI members – financial regulators and policymakers – appreciate the role of efficient DFS in the country’s economic growth, are equipped with practical knowledge and tools to develop clear regulatory frameworks, are made aware of the risks and challenges and the policies adopted to manage them, the implications of the decisions taken by the regulators the focus always being on responsible financial inclusion, not only financial inclusion.

I hope this peer learning forum will bring forward the various models that have been adopted by the AFI members, the risk frameworks that have been adopted, and the impact of the regulatory and policy decisions. Our sincere thanks to the team from BB, who have worked for months to pull together this agenda bringing in various stakeholders, arranging for field visits, to ensure that the learning process is complete in all aspects. I wish you a week of great learning.