G20 Principles for Innovative Financial Inclusion
G20 Principles for Innovative Financial Inclusion Kuala Lumpur, Malaysia 25-28 November 2014 Robin Newnham Financial Inclusion Policy Advisor Alliance for Financial Inclusion(AFI) 1
G20 Principles for Innovative Financial Inclusion In June 2010, G20 Leaders at their Toronto Summit adopted Nine Principles for Innovative Financial Inclusion • Principles came from recognition by G20 Leaders in aftermath of global financial crisis of the mutually reinforcing policy objectives of financial stability, financial inclusion and consumer protection • Developed through a Financial Inclusion Experts Group (FIEG) with consultation with AFI Members and other key partners • Endorsed by G20 Leaders and disseminated by AFI through information guides and country case studies • Used by countries in their national strategies and formally used by organizations such as Financial Action Task Force (FATF) in their financial inclusion work 2
2
Bringing smart policies to life
Maya Declaration established 2011 The first global and measurable set of commitments on financial inclusion by developing and emerging countries – Implementing mechanism for the G20 Principles Country commitments (Maya Declaration on Financial Inclusion)
Key components of Maya Declaration
Concrete and measurable individual commitments based on national circumstances Financial Inclusion strategy / action plan
Evidence-based data
• Knowledge Supporting G20 Principles
Partners
World Bank Group: Financing / TA, Data, etc.
Enabling environment/ Technology • • • •
Leadership Cooperation Diversity Innovation
DFIs: Investment, TA
Proportionate regulatory framework • Proportionality • Framework
AFI : Peer learning, Working groups Progress review, Support services
Consumer protection and empowerment • Protection • Empowerment
Knowledge providers: CGAP, Research institutions
Private sector Donors GPFI Others
G20 Principles for Innovative Financial Inclusion LEADERSHIP: Cultivate a broad-based government commitment to financial inclusion to help alleviate poverty.
COOPERATION: Create an institutional environment with clear lines of accountability and coordination within government; and also encourage partnerships and direct consultation across government, business and other stakeholders.
COUNTRY EXAMPLE: Mexico, advancing the principles of leadership and cooperation, established a National Council for Financial Inclusion in 2011 in order to develop a National Financial Inclusion Strategy, launched in June 2014. Nigeria was one of the first countries to launch a national financial inclusion strategy in October 2012, many other countries are now working on such strategies. 4
4
Bringing smart policies to life
G20 Principles for Innovative Financial Inclusion DIVERSITY: Implement policy approaches that promote competition and provide market-based incentives for delivery of sustainable financial access and usage of a broad range of affordable services (savings, credit, payments and transfers, insurance) as well as a diversity of service providers.
INNOVATION – Promote technological and institutional innovation as a means to expand financial system access and usage, including addressing infrastructure weaknesses. COUNTRY EXAMPLE: In 2012 Peru increased the number of retail agents by almost 4,000 in one year, reaching the country’s Maya Declaration goal, and the Philippines opened 100,000 deposit accounts through the county’s first mobile microfinance bank in its first sixth month.
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Bringing smart policies to life
G20 Principles for Innovative Financial Inclusion PROTECTION – Encourage a comprehensive approach to consumer protection that recognizes the roles of government, providers and consumers.
EMPOWERMENT – Develop financial literacy and financial capability.
COUNTRY EXAMPLE: Fiji from 2013 started providing financial education to 200,000 students as part of the school curriculum; Namibia and Zambia are amongst those countries that have now launched Financial Education Strategies
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Bringing smart policies to life
G20 Principles for Innovative Financial Inclusion PROPORTIONALITY – Build a policy and regulatory framework that is proportionate with the risks involved in such innovative products and services, and is based on an understanding of the gaps and barriers in existing regulation. FRAMEWORK: Consider the following in the regulatory framework, reflecting international standards, national circumstances and support for a competitive landscape: an appropriate, flexible, risk-based AML/CFT regime; conditions for the use of agents as a customer interface; a clear regulatory regime for electronically stored value, and marketbased incentives to achieve the long term goal of broad interoperability and interconnection. COUNTRY EXAMPLE: Ethiopia approved a mobile and agent regulatory banking framework effective from January 2013 7
7
Bringing smart policies to life
G20 Principles for Innovative Financial Inclusion KNOWLEDGE: Utilize improved data to make evidence based policy, measure progress, and consider an incremental “test and learn” by both regulators and service providers.
COUNTRY EXAMPLE: Brazil has launched a Financial Inclusion Index Rwanda is amongst those countries that has completed a demand-side survey indicating strong progress towards the country’s target of 80% of adults having access to financial services by 2017.
8
8
Bringing smart policies to life
Thank you!
27 March 2014, Nadi, Fiji
9
G20 Principles for Innovative Financial Inclusion In June 2010, G20 Leaders at their Toronto Summit adopted Nine Principles for Innovative Financial Inclusion • Principles came from recognition by G20 Leaders in aftermath of global financial crisis of the mutually reinforcing policy objectives of financial stability, financial inclusion and consumer protection • Developed through a Financial Inclusion Experts Group (FIEG) with consultation with AFI Members and other key partners • Endorsed by G20 Leaders and disseminated by AFI through information guides and country case studies • Used by countries in their national strategies and formally used by organizations such as Financial Action Task Force (FATF) in their financial inclusion work 2
2
Bringing smart policies to life
Maya Declaration established 2011 The first global and measurable set of commitments on financial inclusion by developing and emerging countries – Implementing mechanism for the G20 Principles Country commitments (Maya Declaration on Financial Inclusion)
Key components of Maya Declaration
Concrete and measurable individual commitments based on national circumstances Financial Inclusion strategy / action plan
Evidence-based data
• Knowledge Supporting G20 Principles
Partners
World Bank Group: Financing / TA, Data, etc.
Enabling environment/ Technology • • • •
Leadership Cooperation Diversity Innovation
DFIs: Investment, TA
Proportionate regulatory framework • Proportionality • Framework
AFI : Peer learning, Working groups Progress review, Support services
Consumer protection and empowerment • Protection • Empowerment
Knowledge providers: CGAP, Research institutions
Private sector Donors GPFI Others
G20 Principles for Innovative Financial Inclusion LEADERSHIP: Cultivate a broad-based government commitment to financial inclusion to help alleviate poverty.
COOPERATION: Create an institutional environment with clear lines of accountability and coordination within government; and also encourage partnerships and direct consultation across government, business and other stakeholders.
COUNTRY EXAMPLE: Mexico, advancing the principles of leadership and cooperation, established a National Council for Financial Inclusion in 2011 in order to develop a National Financial Inclusion Strategy, launched in June 2014. Nigeria was one of the first countries to launch a national financial inclusion strategy in October 2012, many other countries are now working on such strategies. 4
4
Bringing smart policies to life
G20 Principles for Innovative Financial Inclusion DIVERSITY: Implement policy approaches that promote competition and provide market-based incentives for delivery of sustainable financial access and usage of a broad range of affordable services (savings, credit, payments and transfers, insurance) as well as a diversity of service providers.
INNOVATION – Promote technological and institutional innovation as a means to expand financial system access and usage, including addressing infrastructure weaknesses. COUNTRY EXAMPLE: In 2012 Peru increased the number of retail agents by almost 4,000 in one year, reaching the country’s Maya Declaration goal, and the Philippines opened 100,000 deposit accounts through the county’s first mobile microfinance bank in its first sixth month.
5
5
Bringing smart policies to life
G20 Principles for Innovative Financial Inclusion PROTECTION – Encourage a comprehensive approach to consumer protection that recognizes the roles of government, providers and consumers.
EMPOWERMENT – Develop financial literacy and financial capability.
COUNTRY EXAMPLE: Fiji from 2013 started providing financial education to 200,000 students as part of the school curriculum; Namibia and Zambia are amongst those countries that have now launched Financial Education Strategies
6
6
Bringing smart policies to life
G20 Principles for Innovative Financial Inclusion PROPORTIONALITY – Build a policy and regulatory framework that is proportionate with the risks involved in such innovative products and services, and is based on an understanding of the gaps and barriers in existing regulation. FRAMEWORK: Consider the following in the regulatory framework, reflecting international standards, national circumstances and support for a competitive landscape: an appropriate, flexible, risk-based AML/CFT regime; conditions for the use of agents as a customer interface; a clear regulatory regime for electronically stored value, and marketbased incentives to achieve the long term goal of broad interoperability and interconnection. COUNTRY EXAMPLE: Ethiopia approved a mobile and agent regulatory banking framework effective from January 2013 7
7
Bringing smart policies to life
G20 Principles for Innovative Financial Inclusion KNOWLEDGE: Utilize improved data to make evidence based policy, measure progress, and consider an incremental “test and learn” by both regulators and service providers.
COUNTRY EXAMPLE: Brazil has launched a Financial Inclusion Index Rwanda is amongst those countries that has completed a demand-side survey indicating strong progress towards the country’s target of 80% of adults having access to financial services by 2017.
8
8
Bringing smart policies to life
Thank you!
27 March 2014, Nadi, Fiji
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