NATIONAL FINANCIAL INCLUSION STRATEGY : The Case of Fininland
NATIONAL FINANCIAL INCLUSION STRATEGY : The Case of Fininland
Content 1. Economic and Financial Inclusion Situation 2. Definition and Goals of Financial Inclusion 3. Priority Focus Areas and Targets 4. Key Indicators 5. Actions Plan 6. Planning for Agent and Mobile Banking 7. National Coordinator Structure 8. Responsibilities of National Coordinator 9. Public Private Partnership 10.Specification Assistance 11.Specification Assistance 2
1. Economic and Financial Inclusion Situation
3
Economic Situation : 1. GDP Growth : 7% in the past decade. 2. Inflation : down from 13% in 2012 to 8% in 2013. 3. Unemployment level : 20% 4. Poverty rate : 45% (2011) 5. Economy depend on agriculture, industrial and service sector. 6. MSMEs play important role : 92% of the enterprises and employ 33% of the labor force. Financial Inclusion Situation : 1. 72% MSMEs can’t access to credit. 2. Only 35% adults served by formal financial institutions. 3. 20 M adults save at home. 4. 70% bank branches concentrated in Southern, while half of population live in nothern states. 5. A large proportion of remittances through informal channels.
2. Definition and Goals of Financial Inclusion
4
Financial Inclusion is :
“a process in which disadvantaged groups can access basic financial services at a lower or affordable cost by blending the advancement of technology in a diversified and cost effective way for the betterment of economy”. The Goals : To increase financial access to the adults population including MSMEs.
The Concrete Targets : 1. To increase financial access of the adults population from 35% to 50% within 5 years (2014-2019). 2. To decrease the presentage of MSMEs credit constraints from 72% to 50% within 5 years (2014-2019).
3. Priority Focus Areas and Targets
5
Priority focus areas : 1. Distribution Channel : to make people easy to use financial services. 2. Financial Literacy : to encourage people to use financial
services and also part of consumer protection. 3. Supporting Regulatory Framework/Policy : to increase
access to finance for the people including MSMEs.
4. Key Indicators Dimension
Access
Indicator 1. Number of access points per 10.000 adults at national level and segmented by type and by relevant administrative units 2.1. % of administrative units with at least one access point 2.2. % of total population living in administrative units with at least one access point
Dimension Indicator Usage 3.1. % of adults with at least one type of regulated deposit account (in countries where these data are not available : number of deposit accounts per 10.000 adults) . 3.2. % of adults with at least one type of regulated credit account (in countries where these data are not available : number of loan accounts per 10.000 adults)
Additional Dimension : Quality (financial capability, consumer protection); and Welfare (improvement in poor household)
5. Actions Plan No.
Priority Focus Area
7
Short Term (2014-2015)
Long Term (2016-2019)
1
Distribution Channel
a. Allow FininPost to be an agent of bank (pilot project). b. Enrich mobile banking services . c. Increase the number of service providers for mobile banking.
a. Implement FininPost project in national level. b. Utilize mobile banking for Goverment to Person (G2P) program disbursment. c. Increase the quality of mobile banking.
2
Financial Literacy
a. Conduct financial literacy and a. Develop National Strategy on capability survey. Financial Education. b. Prepare education material b. Integrate financial education and conduct national in national curriculum campaign (TV, comics, (student, migrant worker). workshop, training).
3
Supporting Regulatory Framework/ Policies
Development framework for MSMEs to have financial access. - Catagorize collateral requirement (ie. Movable asset, land title)
a. Create goverment guarantee scheme. b. Implement and evaluate framework for MSMEs.
6. Planning for Agent and Mobile Banking Anti-Money Laundering and Terrorist Financing (AML/TF) Banks should comply the principles of AML/TF in accordance with
applicable regulations. •
Mobile banking agent must comply with AML/TF in the process of due diligence (Know Your Customers – KYC), detection and reporting of suspicious transactions.
•
Limit the amount of transaction (transfer, payment, etc). For
example : Total transaction should not exceed $ 500/day.
8
7. National Coordinator Structure
9
Members : Central Bank, MoF, Relevant Ministries, Financial Institutions, associations. National Council (High level)
•Consultants •Donors
National Steering Committee (Director level)
Distribution Channel WG
Technical Committee (Senior Staff level)
Financial Literacy WG
Supporting Regulatory Framework WG
8. Responsibilities of National Coordinator No. 1
Part of National Coordinator National Council (High Level)
10
Responsibility •
•
Give direction and prioritize the actions to achive the goals (Top Down). Final approval for Financial Inclusion roadmap (Bottom Up).
• Give detail direction (Top Down). • Endorsment the concrete action proposed by Technical Committee and WG (Bottom Up).
2
National Steering Committee (Director Level)
3
Technical Committee • Formulate the concrete actions (Top Down). (Senior Staff Level) • Propose concrete action followed by asking including 3 WG endorsment from National Streering Commitee (Bottom Up).
9. Public Private Partnership
11
Brings together relevant parties (public and private sector) with different strengths to support financial inclusion programs. An Example for Public Private Partnership in G2P Program 9
Taking Money
Payment Instruction
6 Data Verification (CDD)
2 Very Poor Household
Mobile Phone No
Data Validation Companion
Education II
Companion
7
transfer Data Validation Participating Banks
4 Social Ministry
10
Opening Automatic Account
Agent
Report
Telco
1
5 8
3
MOF Account
Education I
SMS notification: Acount Opening Fund in Credit Time to take money
Report
CB Tools : E-money
Mobile Phone
10. Specification Assistance Need assistance among other to : a. Conduct : - Demand side survey. - Diagnostic study and financial literacy survey. - Impact assessment for FininPost pilot project. b. Consultation : - Develop national strategy for financial education. - Develop Monitoring and evaluation framework. - Implement pilot project of FininPost.
12
11. Monitoring and Evaluation Framework Proposed M&E Framework : 1. Regular and thematic data collection (demand and
supply side data). 2. Regular and thematic monitoring and evaluation (including analysing and reviewing data and information). 3. System Information for Financial Inclusion, online website (for reporting and policies communication). 4. Conducting impact assessment.
13
THANK YOU
Content 1. Economic and Financial Inclusion Situation 2. Definition and Goals of Financial Inclusion 3. Priority Focus Areas and Targets 4. Key Indicators 5. Actions Plan 6. Planning for Agent and Mobile Banking 7. National Coordinator Structure 8. Responsibilities of National Coordinator 9. Public Private Partnership 10.Specification Assistance 11.Specification Assistance 2
1. Economic and Financial Inclusion Situation
3
Economic Situation : 1. GDP Growth : 7% in the past decade. 2. Inflation : down from 13% in 2012 to 8% in 2013. 3. Unemployment level : 20% 4. Poverty rate : 45% (2011) 5. Economy depend on agriculture, industrial and service sector. 6. MSMEs play important role : 92% of the enterprises and employ 33% of the labor force. Financial Inclusion Situation : 1. 72% MSMEs can’t access to credit. 2. Only 35% adults served by formal financial institutions. 3. 20 M adults save at home. 4. 70% bank branches concentrated in Southern, while half of population live in nothern states. 5. A large proportion of remittances through informal channels.
2. Definition and Goals of Financial Inclusion
4
Financial Inclusion is :
“a process in which disadvantaged groups can access basic financial services at a lower or affordable cost by blending the advancement of technology in a diversified and cost effective way for the betterment of economy”. The Goals : To increase financial access to the adults population including MSMEs.
The Concrete Targets : 1. To increase financial access of the adults population from 35% to 50% within 5 years (2014-2019). 2. To decrease the presentage of MSMEs credit constraints from 72% to 50% within 5 years (2014-2019).
3. Priority Focus Areas and Targets
5
Priority focus areas : 1. Distribution Channel : to make people easy to use financial services. 2. Financial Literacy : to encourage people to use financial
services and also part of consumer protection. 3. Supporting Regulatory Framework/Policy : to increase
access to finance for the people including MSMEs.
4. Key Indicators Dimension
Access
Indicator 1. Number of access points per 10.000 adults at national level and segmented by type and by relevant administrative units 2.1. % of administrative units with at least one access point 2.2. % of total population living in administrative units with at least one access point
Dimension Indicator Usage 3.1. % of adults with at least one type of regulated deposit account (in countries where these data are not available : number of deposit accounts per 10.000 adults) . 3.2. % of adults with at least one type of regulated credit account (in countries where these data are not available : number of loan accounts per 10.000 adults)
Additional Dimension : Quality (financial capability, consumer protection); and Welfare (improvement in poor household)
5. Actions Plan No.
Priority Focus Area
7
Short Term (2014-2015)
Long Term (2016-2019)
1
Distribution Channel
a. Allow FininPost to be an agent of bank (pilot project). b. Enrich mobile banking services . c. Increase the number of service providers for mobile banking.
a. Implement FininPost project in national level. b. Utilize mobile banking for Goverment to Person (G2P) program disbursment. c. Increase the quality of mobile banking.
2
Financial Literacy
a. Conduct financial literacy and a. Develop National Strategy on capability survey. Financial Education. b. Prepare education material b. Integrate financial education and conduct national in national curriculum campaign (TV, comics, (student, migrant worker). workshop, training).
3
Supporting Regulatory Framework/ Policies
Development framework for MSMEs to have financial access. - Catagorize collateral requirement (ie. Movable asset, land title)
a. Create goverment guarantee scheme. b. Implement and evaluate framework for MSMEs.
6. Planning for Agent and Mobile Banking Anti-Money Laundering and Terrorist Financing (AML/TF) Banks should comply the principles of AML/TF in accordance with
applicable regulations. •
Mobile banking agent must comply with AML/TF in the process of due diligence (Know Your Customers – KYC), detection and reporting of suspicious transactions.
•
Limit the amount of transaction (transfer, payment, etc). For
example : Total transaction should not exceed $ 500/day.
8
7. National Coordinator Structure
9
Members : Central Bank, MoF, Relevant Ministries, Financial Institutions, associations. National Council (High level)
•Consultants •Donors
National Steering Committee (Director level)
Distribution Channel WG
Technical Committee (Senior Staff level)
Financial Literacy WG
Supporting Regulatory Framework WG
8. Responsibilities of National Coordinator No. 1
Part of National Coordinator National Council (High Level)
10
Responsibility •
•
Give direction and prioritize the actions to achive the goals (Top Down). Final approval for Financial Inclusion roadmap (Bottom Up).
• Give detail direction (Top Down). • Endorsment the concrete action proposed by Technical Committee and WG (Bottom Up).
2
National Steering Committee (Director Level)
3
Technical Committee • Formulate the concrete actions (Top Down). (Senior Staff Level) • Propose concrete action followed by asking including 3 WG endorsment from National Streering Commitee (Bottom Up).
9. Public Private Partnership
11
Brings together relevant parties (public and private sector) with different strengths to support financial inclusion programs. An Example for Public Private Partnership in G2P Program 9
Taking Money
Payment Instruction
6 Data Verification (CDD)
2 Very Poor Household
Mobile Phone No
Data Validation Companion
Education II
Companion
7
transfer Data Validation Participating Banks
4 Social Ministry
10
Opening Automatic Account
Agent
Report
Telco
1
5 8
3
MOF Account
Education I
SMS notification: Acount Opening Fund in Credit Time to take money
Report
CB Tools : E-money
Mobile Phone
10. Specification Assistance Need assistance among other to : a. Conduct : - Demand side survey. - Diagnostic study and financial literacy survey. - Impact assessment for FininPost pilot project. b. Consultation : - Develop national strategy for financial education. - Develop Monitoring and evaluation framework. - Implement pilot project of FininPost.
12
11. Monitoring and Evaluation Framework Proposed M&E Framework : 1. Regular and thematic data collection (demand and
supply side data). 2. Regular and thematic monitoring and evaluation (including analysing and reviewing data and information). 3. System Information for Financial Inclusion, online website (for reporting and policies communication). 4. Conducting impact assessment.
13
THANK YOU
