Group Members:
Group Members: -Otto Boris- El Salvador – Director, Central Bank of Olympia -Badr Nabil- Morrocco- Deputy Director, Financial Legislation, CBO -Nancy Michel- Haiti- Deputy Director, Financial Consumer Protection, CBO -Begum Unal- Turkey- Deputy Director, Financial Education, CBO -Minuka Devendra- Sri Lanka –Deputy Director, Financial Access, CBO
Introduction Small island nation
Population 20.1 Mn Lower middle income country Poverty rate of 6.2% Unemployment rate 6.2% Economic growth rate 7.4% Annual Inflation 6.2% Service based economy, focusing on tourism
Financial System Regulated by Central Bank 24 Licensed Commercial Banks 6 Specialised Banks 18 Finance Companies 15 Leasing Companies Regulated by Cooperative Development Authority 724 Rural cooperative societies Un-regulated 16 Micro Finance Institutions
Key Concerns Disparities in rural and urban unemployment and
development rates Non availability of a regulated framework for Micro Finance companies Successful development of a mobile banking service Very high administrative cost of paying out welfare payments in cash form Very low usage of formal accounts to receive salaries, payments and remittances
Rationale for a Financial Inclusion Strategy On an international level many studies conclude that the access to suitable Financial products and usage give the opportunity for the population to achieve a higher quality of life, and give businesses the opportunity to develop further.
Mission of Financial Inclusion Strategy The objective of the national F.I. strategy is to ensure that all individuals have access to savings, to loans and to other financial services and products and thereby to reduce poverty, and realize equitable revenues.
Definition of F.I Access and usage to financial services for all segments of the population through innovation to ensure F.I. with an efficient and secure mechanism for the dissemination of the financial products and services and a formal, structured regulatory framework to guide F.I. With the aim of sustainable economic growth in all regions of Olympia.
Sasana Accord- The Overarching Goal for Olympia Continue to work in a cooperative & cohesive manner, to integrate the F.I. agenda into our countries policies & programs, & ensure the implementation of F.I. at the national level will contribute towards the improvement of the underserved in the global community.
Dimensions of the F.I. Framework Financial Access Financial Education Consumer Protection Development of Legislation
Action Plan Dimension
Priority Area
Action to be taken
Time frame
responsibi lity
Creating a suitable product for the population which is excluded from the financial system
6m
CB
Building a successful mobile financial services
1y
CB
1y
Financial Institutions
Conducting a study for the failure of the first mobile financial service.
8m
CB
Monitoring the new mobile financial services
1y
CB
Financial Including Providing No-frills account the Access excluded
Action Plan Dimension
Priority Area
Action to be taken
Time frame
Engaging new agents in the rural 9 m areas
Financial Access
Creating micro- insurance and Extending micro- pension products the coverage Encouraging all financial institutions to open economic branches in the rural areas
responsibi lity Financial Institutions
1y
Financial & Insurance Institutions
9m
CB
Action Plan Dimension
Priority Area
Action to be taken Conducting surveys to monitor Financial Capability level
Financial Education
Time frame
Responsi bility
6m
CB
Encourage establishment of 8m education and research centers for financial services and encourage Awareness cooperation between universities Raising and the financial sector Create a joint website for documents and studies regarding financial education and publicize financial education activities via social media
1y
High Education Council
CB
Action Plan Dimension
Priority Area
Action to be taken
Time frame
responsi bility
1y
Ministry of family and social policies
Inform and train teachers, media 1y members and trainers on financial Awareness subjects Raising
Ministry of National Education & CB
Raise awareness among housewives about financial matters
Financial Education
Lectures at primary and secondary 6 m school on financial education.
Ministry of National Education
Action Plan Dimension
Financial Consumer Protection
Priority Area Ensure financial consumers make informed choices about Financial Products and Services and know the ways for legal remedies
Action to be taken Strengthen the rules and practices relating to protection of private and financial data of financial consumers
Time frame 6m
Create statistical data 1y regarding complaints and their resolutions, and share them with the public and closely monitor the complaints of financial consumers.
responsibili ty CB
CB
Action Plan Dimension
Financial Consumer Protection
Priority Area Ensure financial consumers make informed choices about Financial Products and Services and know the ways for legal remedies
Action to be taken
Time frame
responsibility
Ensure that products and services offered to financial consumers are suitable for their needs
6m
CB
Ensure that the contractual terms and conditions offered by financial institutions as well as ways to legal remedies are understandable by financial consumers
10 m
CB
Action Plan Dimension
L e g i s l a t i o n
Priority Area
Action to be taken Get the Bill passed through parliament
Prepare the currently unregulated MF companies by capacity building Form legislation & understanding of the legislation for Micro Finance Preparation of MF regulations & (MF) capacity building of CB officers
Monitoring of compliance with MF legislation
Time Respon frame sibility 6m
MoF
6m
CB
6m
CB
1y
CB
Action Plan Dimension
L e g i s l a t i o n
Priority Area
Action to be taken
Time frame
Draft new legislation regarding 1m the criminal activity of conducting Development informal lending activities & enforcement of strict laws against Get the bill passed through 6m informal parliament credit sector to ensure Educate law enforcement officers 6m Consumer to be conversant with new law Protection
Respon sibility MoJ
MoJ
MoJ
Action Plan Dimension
L e g i s l a t i o n
Priority Area Development of a decree to ensure all Government payments to individuals are made to formal a/c
Action to be taken
Time frame
responsibi lity
Presidential decree to enable all Government payments to individuals to go through formal accounts
immediate
Opening of a/c by individual who receive Government payments through F.I. institutions
1y
Financial Institutions
All Government agencies to make payments only to individual a/c
6m
MoF
Coordination Structure National Council (NC)
National Steering Committee (NSC)
• Comprises Permanent Secretaries from Government Ministries; and Heads of Regulatory Authorities and practitioners Associations/Networks • Role: Overall strategic directions and oversight of the FI agenda
• Made up of members at the level of Directors and Commissioners from Government Ministries and Agencies; Regulatory Authorities and practitioners associations • Role: Coordination and quality control Report to National Council
Coordination Structure National Technical Committee (NTC)
National Secretariat (NS)
• Made up of members at the level of Senior staff (technical staff) • Role: Initiating, implementing and reporting on progress of Financial Inclusion activities to Steering Committee
• This is the Central Bank of Olympia • Role: Provision of Secretarial support to all committees collecting and compiling financial inclusion information and distributing this information when required. Monitoring the performance indicators and targets
National Targets Dimension
Enabler
Indicator
Access
Proximity to Financial access points
ATMs per 1000 km
Usage
Quality
Baseline National Target (2016) 50.0
Outstanding deposits with regulated financial Institutions as a % of GDP
45.0
85.0
All Government payments through an a/c
a/c used to receive government payments
4%
100%
remittances
a/c used to receive remittances
5%
25%
Appropriateness of services offered
% of population Accessing micro insurance products
50%
% of SME with access to formal financial services
65%
Assistance required to achieve F.I. Carry out a study to get insights into the failure of mobile
banking services in 2005. Getting consultancy from several international
organizations. (World Bank, AFI, etc.) Technical assistance in implementing the strategy. Capacity building of the CB & other relevant stakeholders. Survey on financial access available to MSMEs
Monitoring and Evaluation CB and other stakeholders will prepare reports every
month to the National Secretariat Progress Reports will be prepared every 3 months to the National Technical Committee Bi- annually reports to National Steering Committee (NSC) Annual Reports to National Council (NC)
28.11.2014- OLYMPIA
Introduction Small island nation
Population 20.1 Mn Lower middle income country Poverty rate of 6.2% Unemployment rate 6.2% Economic growth rate 7.4% Annual Inflation 6.2% Service based economy, focusing on tourism
Financial System Regulated by Central Bank 24 Licensed Commercial Banks 6 Specialised Banks 18 Finance Companies 15 Leasing Companies Regulated by Cooperative Development Authority 724 Rural cooperative societies Un-regulated 16 Micro Finance Institutions
Key Concerns Disparities in rural and urban unemployment and
development rates Non availability of a regulated framework for Micro Finance companies Successful development of a mobile banking service Very high administrative cost of paying out welfare payments in cash form Very low usage of formal accounts to receive salaries, payments and remittances
Rationale for a Financial Inclusion Strategy On an international level many studies conclude that the access to suitable Financial products and usage give the opportunity for the population to achieve a higher quality of life, and give businesses the opportunity to develop further.
Mission of Financial Inclusion Strategy The objective of the national F.I. strategy is to ensure that all individuals have access to savings, to loans and to other financial services and products and thereby to reduce poverty, and realize equitable revenues.
Definition of F.I Access and usage to financial services for all segments of the population through innovation to ensure F.I. with an efficient and secure mechanism for the dissemination of the financial products and services and a formal, structured regulatory framework to guide F.I. With the aim of sustainable economic growth in all regions of Olympia.
Sasana Accord- The Overarching Goal for Olympia Continue to work in a cooperative & cohesive manner, to integrate the F.I. agenda into our countries policies & programs, & ensure the implementation of F.I. at the national level will contribute towards the improvement of the underserved in the global community.
Dimensions of the F.I. Framework Financial Access Financial Education Consumer Protection Development of Legislation
Action Plan Dimension
Priority Area
Action to be taken
Time frame
responsibi lity
Creating a suitable product for the population which is excluded from the financial system
6m
CB
Building a successful mobile financial services
1y
CB
1y
Financial Institutions
Conducting a study for the failure of the first mobile financial service.
8m
CB
Monitoring the new mobile financial services
1y
CB
Financial Including Providing No-frills account the Access excluded
Action Plan Dimension
Priority Area
Action to be taken
Time frame
Engaging new agents in the rural 9 m areas
Financial Access
Creating micro- insurance and Extending micro- pension products the coverage Encouraging all financial institutions to open economic branches in the rural areas
responsibi lity Financial Institutions
1y
Financial & Insurance Institutions
9m
CB
Action Plan Dimension
Priority Area
Action to be taken Conducting surveys to monitor Financial Capability level
Financial Education
Time frame
Responsi bility
6m
CB
Encourage establishment of 8m education and research centers for financial services and encourage Awareness cooperation between universities Raising and the financial sector Create a joint website for documents and studies regarding financial education and publicize financial education activities via social media
1y
High Education Council
CB
Action Plan Dimension
Priority Area
Action to be taken
Time frame
responsi bility
1y
Ministry of family and social policies
Inform and train teachers, media 1y members and trainers on financial Awareness subjects Raising
Ministry of National Education & CB
Raise awareness among housewives about financial matters
Financial Education
Lectures at primary and secondary 6 m school on financial education.
Ministry of National Education
Action Plan Dimension
Financial Consumer Protection
Priority Area Ensure financial consumers make informed choices about Financial Products and Services and know the ways for legal remedies
Action to be taken Strengthen the rules and practices relating to protection of private and financial data of financial consumers
Time frame 6m
Create statistical data 1y regarding complaints and their resolutions, and share them with the public and closely monitor the complaints of financial consumers.
responsibili ty CB
CB
Action Plan Dimension
Financial Consumer Protection
Priority Area Ensure financial consumers make informed choices about Financial Products and Services and know the ways for legal remedies
Action to be taken
Time frame
responsibility
Ensure that products and services offered to financial consumers are suitable for their needs
6m
CB
Ensure that the contractual terms and conditions offered by financial institutions as well as ways to legal remedies are understandable by financial consumers
10 m
CB
Action Plan Dimension
L e g i s l a t i o n
Priority Area
Action to be taken Get the Bill passed through parliament
Prepare the currently unregulated MF companies by capacity building Form legislation & understanding of the legislation for Micro Finance Preparation of MF regulations & (MF) capacity building of CB officers
Monitoring of compliance with MF legislation
Time Respon frame sibility 6m
MoF
6m
CB
6m
CB
1y
CB
Action Plan Dimension
L e g i s l a t i o n
Priority Area
Action to be taken
Time frame
Draft new legislation regarding 1m the criminal activity of conducting Development informal lending activities & enforcement of strict laws against Get the bill passed through 6m informal parliament credit sector to ensure Educate law enforcement officers 6m Consumer to be conversant with new law Protection
Respon sibility MoJ
MoJ
MoJ
Action Plan Dimension
L e g i s l a t i o n
Priority Area Development of a decree to ensure all Government payments to individuals are made to formal a/c
Action to be taken
Time frame
responsibi lity
Presidential decree to enable all Government payments to individuals to go through formal accounts
immediate
Opening of a/c by individual who receive Government payments through F.I. institutions
1y
Financial Institutions
All Government agencies to make payments only to individual a/c
6m
MoF
Coordination Structure National Council (NC)
National Steering Committee (NSC)
• Comprises Permanent Secretaries from Government Ministries; and Heads of Regulatory Authorities and practitioners Associations/Networks • Role: Overall strategic directions and oversight of the FI agenda
• Made up of members at the level of Directors and Commissioners from Government Ministries and Agencies; Regulatory Authorities and practitioners associations • Role: Coordination and quality control Report to National Council
Coordination Structure National Technical Committee (NTC)
National Secretariat (NS)
• Made up of members at the level of Senior staff (technical staff) • Role: Initiating, implementing and reporting on progress of Financial Inclusion activities to Steering Committee
• This is the Central Bank of Olympia • Role: Provision of Secretarial support to all committees collecting and compiling financial inclusion information and distributing this information when required. Monitoring the performance indicators and targets
National Targets Dimension
Enabler
Indicator
Access
Proximity to Financial access points
ATMs per 1000 km
Usage
Quality
Baseline National Target (2016) 50.0
Outstanding deposits with regulated financial Institutions as a % of GDP
45.0
85.0
All Government payments through an a/c
a/c used to receive government payments
4%
100%
remittances
a/c used to receive remittances
5%
25%
Appropriateness of services offered
% of population Accessing micro insurance products
50%
% of SME with access to formal financial services
65%
Assistance required to achieve F.I. Carry out a study to get insights into the failure of mobile
banking services in 2005. Getting consultancy from several international
organizations. (World Bank, AFI, etc.) Technical assistance in implementing the strategy. Capacity building of the CB & other relevant stakeholders. Survey on financial access available to MSMEs
Monitoring and Evaluation CB and other stakeholders will prepare reports every
month to the National Secretariat Progress Reports will be prepared every 3 months to the National Technical Committee Bi- annually reports to National Steering Committee (NSC) Annual Reports to National Council (NC)
28.11.2014- OLYMPIA
