30-06-2009

A new strategy for measuring financial access

AFI is funding the development of a strategic plan for measuring and monitoring access to financial services in Mexico that could be applied in other countries.

The proposal for the strategy, submitted by the National Banking and Securities Commission (CNBV) in Mexico, involves analyzing existing information to establish a reliable baseline, defining necessary measures and assessing priorities against available resources. Information gaps will also be identified and filled, and a coherent analysis of trends assembled. Once the strategic plan has been developed, CNBV will collect, analyze and present information on a regular basis, preferably with annual monitoring reports.

Countries wishing to promote financial inclusion need to develop an active strategy to monitor and measure financial access over time. This requires establishing an accurate baseline and subsequent monitoring of how the situation evolves in response to policy measures or changing economic conditions. As such data and monitoring are crucial for developing effective policies for increasing financial access, other countries could also learn from the Mexican approach and apply a similar methodology.

CNBV is Mexico’s main financial regulatory agency and one of few financial authorities in the world to set up a special unit to promote financial inclusion. It proposes regulation that is conducive to developing new financial products and services, including regulations to promote the use of retailers as banking agents and a legal framework for providing mobile financial services.

Membership climbs to 62 countries

Fiji, Samoa and Tuvalu are the latest countries to agree to join AFI, bringing the total number of member countries up to 62. Together the 62 countries account for nearly 70% of the world’s “unbanked”.

Central bankers and other senior policy makers from the following countries have either become members of AFI or agreed to join:

G24 throws weight behind AFI

AFI is “exactly what the doctor ordered” said Amar Bhattacharya, Director of the G24 Secretariat, at a meeting of more than 20 policymakers at the IMF/World Bank spring conference in Washington DC.

The “closed door” event, which was hosted by the G24 Secretariat at the end of April, was designed to introduce central bankers and other senior policymakers from G24 countries to AFI and to identify ways that AFI’s members, who represent around 70% of the world’s “unbanked” population, could work together to accelerate greater financial access for the poor.

“One of the reasons that the G24 is so keen to collaborate with AFI is that it puts policymakers in the driving seat,” said Amar Bhattacharya at the start of the meeting. “This is exactly what the doctor ordered. Having a network of policymakers in developing countries working together on financial inclusion and being able to learn from each other and through experimentation, as AFI offers its members, is great.

“This is especially important for tackling financial inclusion since the solutions largely rest in developing countries. There’s a huge amount of innovation going on in these countries but it often doesn’t follow the typical textbook model so it has to be shared case-by-case and peer-to-peer to identify common learnings and to adapt them to countries’ individual circumstances. AFI provides a great and much-needed vehicle for doing this.”

Dr Tarisa Watanagase, Governor of the Bank of Thailand, and Guillermo Babatz, President of Mexico’s National Banking and Securities Commission, who are both AFI Start-Up Committee members, also highlighted the fact that AFI’s independence gives members the freedom to devise the most appropriate solutions for their countries, based on best practice and evidence from around the globe. “We want the ingredients, not the recipes,” said Guillermo Babatz. “There isn’t a simple, single solution for every country.”

Policymakers from a broad spectrum of countries, from Egypt, Ethiopia and Brazil to Pakistan, also contributed to the discussion.

First grant announced

The Russian Microfinance Centre (RMC) has become the first organisation to receive a grant from AFI. The knowledge-exchange grant was used to fund a visit by Russian policy makers to Brazil to learn about the country’s novel approach to agent banking.

Currently, around 60 million people in Russia, equivalent to about 40% of the population, do not have access to sufficient financial services, largely due to inadequate financial structures in remote regions and a mismatch between service delivery technologies and the needs of specific groups. Branchless banking, including the use of non-bank retail agents, is part of the Russian Government’s strategy to overcome these hurdles.

Supported by a $27,000 grant from AFI, a high-level delegation from Russia, including the Deputy Minister of Economic Development and seniors representatives from Russia’s banking and microfinance community, visited agent banking facilities in Brazil and discussed practical regulatory issues with leading authorities and government officials in the country, which has pioneered agent banking.

Further information about AFI’s grants can be located in the Grants section of our website.

Further information about The Russian Microfinance Centre (RMC) can be found on their website.

Global Policy Forum takes shape

At AFI's first annual Global Policy Forum in Kenya in September 2009, policymakers will set the agenda and ask researchers, technical experts and other participants to help draw up a practical roadmap to increase financial access.

Before the three-day event takes place on 14-16 September 2009, policymakers from AFI’s 45 member countries will ask participants to consider solutions to a range of obstacles that are standing in the way of greater financial inclusion, focusing on AFI’s six main policy areas. These ideas will be systematically developed at the conference and step-by-step plans and deliverables agreed to “bring smart policies to life”, from creating the regulatory framework to delivering the services on the ground.

The Forum will also include “out of the box” side events dealing with issues such as knowledge sharing and marketing financial inclusion, as well as field visits to see and experience microfinance solutions in action in local villages.

Further information about the Global Policy Forum will be released soon.

AFI Announcement

Around 20 central bankers and other policymakers from developing countries attended an AFI announcement at the IMF in Washington DC on 24 April.

AFI membership

More than 40 countries, representing over 70% of the world's "unbanked" population, have agreed to become membcers of AFI. More are expected to join soon.