Financial inclusion strategies (FIS) are comprehensive public documents that systematically accelerate a country’s level of financial inclusion. Typically, national financial inclusion strategies (NFIS) include analysis on a country’s current financial inclusion status and constraints, measurable goals, how and when that country proposes to reach these goals, and how the progress and achievements of the NFIS will be assessed.
A national financial inclusion strategy (NFIS) is a comprehensive public document formulated at the national level to systematically accelerate the level of financial inclusion in a particular country. Typically, an NFIS will include an analysis of the current status and constraints on financial inclusion, a measurable financial inclusion goal, how the country proposes to reach this goal and by when, and how it would assess the progress and achievements of the NFIS.” An NFIS is developed through a broad consultative process involving, among others, public and private sector stakeholders engaged in financial sector development.
It is not surprising that NFIS have gained traction in recent years, since the logic appears simple: greater financial inclusion promises more inclusive growth and development, while national strategies have the potential to accelerate financial inclusion. Empirical evidence appears to support this position. For example, the South Africa Financial Sector Charter helped increase the percentage of banked adults from 46% to 64% in four years, and six million basic bank accounts (Mzansi accounts) were opened. In the United Kingdom, a Financial Inclusion Task Force contributed to halving the number of unbanked adults through a variety of policy measures. Reinforcing this evidence, the World Bank recently reported that countries that have launched an NFIS have achieved much higher levels of financial inclusion than other countries in recent years. The evidence from countries such as Brazil, Malaysia, Namibia and Tanzania support this assertion. Analysis carried out by AFI and Bank Negara Malaysia has also reaffirmed the positive impact of NFIS.
The growing number of NFIS across all regions shows the influence of knowledge and peer learning on strategy development. However, it is important to note that practices tend to change over time based on how much knowledge is shared through mechanisms such as peer learning, and the extent to which this knowledge is applied in the strategy formulation process. As analysed in the FISPLG publication National Financial Inclusion Strategies: Current State of Practice, assessing the current state of practice of NFIS has other limitations, as well. First, there is no systematic database in place with general data on NFIS or on the specific practices different countries have adopted. Even the scattered data that is available relates mainly to the formulation of national strategies, while very little data is available on implementation and progress monitoring and evaluation. Second, there is no consensus on what should legitimately be included in an NFIS. For example, some countries tend to include macroeconomic development strategies even though these may not significantly or strategically address the core issues of financial inclusion.
NFIS are developed through broad consultative processes involving, among others, public and private sector stakeholders engaged in financial sector development. The growing number of NFIS across all regions shows the influence of knowledge and peer learning on strategy development.
Global trends in financial inclusion strategies include emerging issues such as climate change and marginalized groups. In addition to women, other groups that need to be considered when building national financial inclusion include youth, forcibly displaced persons and people with disabilities.
Fundamental and emerging topics under FIS are explored in-depth through AFI’s Financial Inclusion Strategies Working Group (FISPLG).
A key commitment within the Denarau Action Plan is to “consider and implement best practices in integrating policies for women’s financial inclusion and gender considerations within NFIS” and to “develop knowledge products to support this work”.
FIS commitments are being implemented to ensure that national coordination is driving financial inclusion programs effectively.
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Financial Inclusion Strategy
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AFI’s Financial Inclusion Strategy Peer Learning Group (FISPLG)
Policymakers in the AFI network have reached a consensus that National Financial Inclusion Strategies (NFIS) are essential in coordinating financial inclusion policies and ensuring they are based on sound data and the impacts are robustly monitored. AFI’s Financial Inclusion Strategy (FIS) Peer Learning Group promotes the development, implementation and monitoring and evaluation of national financial inclusion strategies.
Mohanad Salous, Palestine Monetary Authority
Teresa Pascoal, Banco Nacional de Angola
Aishath Asna Hamdi, Maldives Monetary Authority
Gender Focal Point
Moise Bigirimana, National Bank of Rwanda
FISPLG provides practical support to countries that have made commitments under the Maya Declaration and to the G20 through its Financial Inclusion Peer Learning Program.
NFIS Current State of Practice Subgroup
Given that fact that the typical NFIS duration is 3-4 years and the fact that AFI’s members have started their NFIS at different time intervals, a 2021 update is due to be able to capture the latest and most relevant updates and developments and compare these with countries which launched their NFIS before 2018, and those which have conducted a NFIS Mid-Term Review between 2018 and 2021. Given the impact of COVID-19 on NFIS development and implementation this Report will also be a timely publication to document various COVID-19 policy responses which are aimed at mitigating the impact of COVID-19 on NFIS. In 2020 FISPLG published the AFI NFIS Policy Model which is a compendium of NFIS good practices and this Policy Model can now be used as a solid framework to effectuate the stocktaking, including the measurement of the existence of cross-cutting or new topics in NFIS such as gender, youth, forcibly displaced persons (FDP’s), Inclusive Green Finance (IGF). The 2022 update will also aim to measure the potential impact of COVID-19 on the different NFIS components and the approaches used to mitigate COVID-19’s impact, to ensure continued NFIS progress and promote fair and equitable access to quality financial services in both the mitigation and recovery phases. While a subsection of this report will specifically focus on the impact of the COVID-19 crisis on NFIS and actions undertaken to mitigate this impact, many of the actions/recommendations will be applicable to another crisis and therefore can considered in current and future NFIS so as to enhance resilience to crises. This update will also aim to measure progress related to other AFI financial inclusion agreements/accords, including the Denarau Action Plan (DAP) commitment 2.
Enhancing Financial Inclusion in Rural Areas Subgroup
In recent years, the use of electronic technology is revolutionizing the provision of rural financial services, including insurance, and is driving down the costs of handling small transactions through branchless/mobile banking and these digitally enabled services and platforms (which bundle financial and non-financial services) are offering many small-scale growers new opportunities to engage in agriculture. Digitization offers the potential to revolutionize access to financial services in rural areas, provide more seamless connection for farmers and rural enterprises to value chains, reduce transaction costs for payments to suppliers, and increase financial resilience, for example through access to inclusive insurance. The increasing penetration of mobile financial services and biometric technologies that has been seen in recent years offers the potential to achieve efficient client enrolment and widespread access to digital payments. In short, digitization is a new frontier in developing vibrant, resilient rural and agricultural livelihoods.
Integrating DFS in a NFIS Subgroup
Principle 1 of the G20 High Level Principles for Digital Financial Inclusion (2016) promotes digital financial services as a priority to drive development of inclusive financial systems, including through coordinated, monitored, and evaluated national strategies and action plans. Last-mile access to digital financial services is the key to successful financial inclusion and is a crucial enabler in all NFIS. The COVID-19 pandemic has accelerated the digital transformation of economies and will play an even more important role for individuals, businesses and financial services providers which are seeking to navigate the eventual post-COVID-19 world. During COVID-19, countries which already had a NFIS in place have had to revisit and update (e.g., through NFIS Mid-Term Reviews) the role of digital financial services to achieve their financial inclusion goals. At the same time, countries which developed or launched their NFIS in this dramatically different economic environment have had the opportunity to leverage this accelerated pace in digitalization and maximize DFS/Fintech solutions with the aim of achieving specific financial inclusion goals as devised in their NFIS.
The objective of this Guideline Note is to inquire how certain AFI members have sought to incorporate DFS in their NFIS taking into account the balance between the private and public sector while at the same time ensuring collaboration among the relevant stakeholders and developing an inclusive DFS ecosystem (with appropriate enabling regulatory and legal framework), enabling smooth stakeholder coordination so as to achieve the specific financial inclusion goals as set out in the NFIS of a specified AFI member country.
|Events||1st: Abuja, Nigeria||2nd: Bangkok, Thailand
3rd: Kuala Lumpur, Malaysia
|54th: Nadi, Fiji
5th: Port of Spain, Trinidad & Tobago
|6th: Manila, Philippines
7th: Kuala Lumpur, Malaysia
|8th: Dar es Salaam, Tanzania
9th: Nadi, Fiji
|10th: Dushanbe, Tajikistan
11th: Sharm El Sheikh, Egypt
|12th: Siem Reap, Cambodia
13th: Sochi, Russia
|14th: Livingstone, Zambia
15th: Kigali, Rwanda
|16th: Virtual Meeting
17th: Virtual Meeting
|18th: Virtual Meeting
19th: Virtual Meeting
AFI's Financial Inclusion Strategy Peer Learning Group (FISPLG) promotes the development, implementation and monitoring and evaluation of national financial inclusion strategies.
Financial Inclusion Strategy Peer Learning Group (FISPLG) Technical Virtual Meeting discussed the importance of integrating youth and forcibly displaced people in a national financial inclusion strategy followed by country-specific member testimonies and Q&A.- Read More
Financial Inclusion Strategy Peer Learning Group (FISPLG) Webinar on “Addressing the Impact of COVID-19 on Gender Savings Groups” includes discussions on the concept of Gender Savings Groups (GSG), their advantages and disadvantages, the effects of COVID-19 on GSG and measures that can be taken to mitigate these effects. The webinar concludes with participants exploring why COVID-19 policy responses need to be financially inclusive and gender-sensitive.- Read More
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