Agent regulation tops bill at Windsor “Global Leadership” seminar High-level representatives from 18 countries met in Windsor, UK from 8-9 March, UK to discuss the best way to regulate new modes of financial service delivery to reach poorer populations. At a seminar hosted by AFI, CGAP and the UK Department for International Development (DFID), policymakers from around the world underlined that implementing regulatory frameworks that strike the right balance between protecting customers and promoting innovation is critical to the further expansion and success of technological-based solutions – such as mobile phone financial services and the use of agents for service delivery. The seminar included leaders from the sector and representatives of the G-20 economies, which have committed to support the dissemination new modes of financial service delivery capable of reaching the poor. Building on the existing international dialogue between policymakers, the Windsor seminar – entitled the ‘Windsor Global Leadership Seminar on Regulating Branchless Banking’ - explored recent regulatory developments in the use of agent banking, highlighting the advantages and drawbacks of different approaches from around the world. The discussions focused on the kinds of entities that should be permitted to act as agents and how best to level the playing field to best enable the provision of financial services. “Many of the most innovative policy solutions for financial inclusion are coming from developing countries and it is vital that these experiences are listened to and learned from. Bringing developing country perspectives to the Windsor seminar will accelerate the international exchange of ideas and best practice, arming more regulators with the knowledge they need to implement proportionate and balanced regulation,” said Alfred Hannig, Executive Director of AFI. Representing the AFI network, Steering Committee member and Deputy Governor from the Bangko Sentral ng Pilipinas, Philippines Nestor A. Espenilla, gave remarks during the opening session on Monday 8 March. And Steering Committee Chair and Governor of the Central Bank of Kenya Professor Njuguna S. Ndung'u, gave a keynote address during the official seminar dinner. The Windsor event is the third annual seminar for high-level policy makers and regulators hosted by CGAP, DFID and AFI. Coverage of the seminar is available at
http://technology.cgap.org.
AFI Policy paper - Financial inclusion measurement for regulators: Survey design and implementation Having appropriate and up-to date information about levels and trends of financial inclusion is a critical first step towards devising relevant policy approaches to further deepen the reach of the financial sector. Interest in collecting such data is increasing across the globe, resulting in the development of a number of cross-country and country-specific data collection strategies in recent years. Responding to this interest and need, AFI presents this policy paper to help inform financial policymakers and regulators on how to develop a strategy for gathering financial inclusion data using surveys of different kinds. The report considers the advantages and disadvantages of various models and strategies, ranging from simply leveraging already available data sets, to modifying existing surveys to include new questions on financial inclusion, or even to designing and implementing a new financial survey. The release of this paper is timely as policymakers from 10 AFI member countries meet to discuss financial inclusion data gathering at the upcoming AFI-BOT Introductory Workshop of the Financial Inclusion Data Partnership to be held in Bangkok on March 18th and 19th. Download the report > Case study – Enabling mobile money transfer: the Central Bank of Kenya’s treatment of M-Pesa AFI case studies are developed specifically for policymakers. The cases capture the actual experiences and challenges faced by leading policymakers from developing countries as they innovate and implement new or reformational policy solutions in their country. Enabling mobile money transfer: the treatment of M-Pesa focuses on the work of AFI Policy Champion Gerald Nyaoma and his team at the Central Bank of Kenya with regards to the M-Pesa mobile money transfer service. It covers the period of development of the M-Pesa product from concept inception in 2005 to December 2008. Download the case study
> Mexico’s CNBV shows leadership in financial inclusion data gathering The first Reporte de Inclusión Financiera (State of financial inclusion report) from Comisión Nacional Bancaria y de Valores de Mexico (CNBV) provides an outstanding example of a financial regulator in a developing country taking the lead to require commercial banks to provide detailed data that allow the regulator to measure and monitor financial inclusion goals. The report, which was produced with support from an AFI grant, presents supply-side data and drawing on multiple sources to give a picture of financial inclusion of all the states and municipalities in the country. It is available to public and private sector players and future issues will publish new demand-side data from household and individual surveys. The report is one part and the dissemination tool of a larger CNBV strategy for measuring financial inclusion. The report is available here (in Spanish). AFI is now looking into possibilities for translation of key elements of the document into other languages, to allow for wider knowledge sharing.
Download the report Pacific island central banks launch financial inclusion working group It is estimated that only 30% or less of Pacific Islanders currently have access to basic financial services making it the least banked region in the world. In late 2009, the governors of the five Pacific Islands with central banks passed a resolution at their annual meeting to form a subgroup on financial inclusion and AFI. Activities anticipated from the group include capacity building and policy development in mobile phone financial services and related issues including consumer protection and AML Know Your Customer requirements. The first meeting of this ‘working group’ took place from 23-25 February 2010 during the South Pacific Central Bank Governors Meeting and the Pacific Financial Inclusion Programme and was hosted by the Reserve Bank of Vanuatu. The group’s discussions centered around how to extend financial services to the unbanked, including how to oversee new deposit taking services emerging in the microfinance community, and technologies such as mobile phone banking while protecting clients. Governor of the Reserve Bank of Vanuatu, Odo Tevi, opened the meeting saying “The geographical set up of Vanuatu with 70-80% of the population living in rural areas gives us all the more reason to embrace the financial inclusion concept.” He further added that “we will learn from each other and provide leadership to ensure that our people have access to better financial services and are literate to exploit the opportunities.” Central Banks gear up for financial inclusion – read the press release from the meeting
26-02-2010 AFI By-Laws now available Endorsed at the third meeting of the AFI Steering Committee, the AFI By-Laws provide guidance on management, roles and responsibilities and process. > Policymakers and practitioners meet in Egypt to discuss potential of microinsurance On 18-19 December 2009, the Egyptian Financial Supervisory Authority (EFSA) organized a seminar in Cairo to share information on successful policy and regulatory approaches in the area of microinsurance and to increase awareness of the market dynamics and potential of this sector in Egypt and the MENA region. Supported by an AFI grant, this first-ever regional seminar on micro-insurance in the MENA region seminar brought together a range of public- and private-sector stakeholders to exchange knowledge on practical solutions and industry approaches for expanding the uptake of microinsurance products and services. It also identified some key barriers for developing appropriate microinsurance solutions for low-income people and strategies to overcome these. EFSA is a public policy institution responsible for licensing and regulating non-bank financial markets and instruments. Among its core activities, EFSA is responsible for developing the Egyptian insurance sector and for protecting the rights of insurance policyholders. 27-01-2010 Latest AFI Newsletter View our latest newsletter or subscribe to future editions. > AFI Policy Notes: ‘Consumer Protection’ marks launch of series AFI launches its ‘Policy Note Series’, with the first note focusing on the issue of consumer protection. AFI's series of policy notes are made specifically for policymakers and focus on the key policy solutions that have been proven to promote financial inclusion in developing countries. Drawing on existing research, they define the policy solution, identify the critical issues for decision-makers and give practical examples from developing countries. The notes also identify policy champions who are at the forefront of implementation, and give an overview of relevant reading material. Entitled Consumer Protection: Leveling the playing field in financial inclusion, the consumer protection note explores key challenges faced by regulators in addressing this critical issue such as establishing regulation and supervision, defining the role of the financial services industry, making room for consumer input, and promoting financial education. The note draws on examples and lessons learned from developing countries including Malaysia, Mexico, Peru, the Philippines and South Africa. Download the Policy Note More on consumer protection Third AFI Steering Committee endorses by-laws, confirms commitment The AFI Steering Committee met for the third time on 20 January 2010. Meeting via video-link up, discussions centered around key issues of governance and of future strategic direction. Opening the meeting, Committee Chair, and Governor of the Central Bank of Kenya Prof. Njuguna Ndung'u, acknowledged a number of important developments that have taken place since the last meeting of the Committee in September last year and urged fellow members to “lead the way – with home grown financial inclusion policies…to grow and develop the network.” In a major development for AFI governance, the Steering Committee approved and endorsed the ‘AFI by-laws’, enabling a solid governance guideline and base for the ongoing development of the network. The group also moved forward with discussions and planning for the selection of the potential additional members of the Committee as well as for Steering Committee Independent Advisor. A number of potential shortlist countries were identified from focused candidate search will now be initiated. In the area of strategic direction, the Committee were updated a number of key issues including various collaborations with other stakeholders , AFI member surveys, AFI secondment programme and potential venues of the next Global Policy Forum. Specific updates were given on recent and ongoing collaboration by AFI on the G20 Financial Inclusion Initiative and the planned creation of AFI working groups on focus issues such as M-banking and financial inclusion data. The Steering Committee confirmed their support and active issues in these areas. “AFI is poised to play a very critical role as new financial system architecture is developed and unveiled. On our part as Steering Committee members, we shall continue to provide the necessary support. It is also important that as AFI members, we keep on interacting and sharing information sets that will enrich our financial inclusion initiatives” said Professor Ndung’u in his closing remarks, underlining the Steering Committees ongoing commitment to the AFI network and activities. Home sweet home! AFI moves into permanent Bangkok office The AFI team is delighted to announce the official opening of its permanent office in Bangkok, Thailand. Following many months of hot-desking and working out of temporary space, the team has finally settled in a unit fully dedicated to the AFI team and work,
located within Bangkok’s city centre. “We now have an official AFI ‘home’,” said AFI Executive Director Alfred Hannig. “This gives a much more conducive environment for our work to support, activate and serve the AFI member network.”
AFI welcomes three new members Kicking off 2010, AFI welcomes three new official members to the Alliance. The Bank of Zambia, the Superintendencia de Bancos de Panamá and the Superintendencia del Sistema Financiero de El Salvador are the latest organizations to join the network. Da Afghanistan Bank mobile banking learning exchange in the Philippines Officials from Da Afghanistan Bank (DAB) visited the Philippines from 12-15 January 2010 on an AFI grant exchange to learn about the innovative regulatory approach that has allowed mobile phone banking to take place in the country. The Philippines example, enabled by the Bangko Sentral ng Pilipinas, is unique in that it has allowed for the growth of a mobile banking industry that has adopted both bank-centric and telco-centric models. The visit included a packed schedule of meetings with key mobile banking stakeholders from both private and public sectors in the Philippines. Highlights included meetings with SMART telecom, demonstrations of the linkage between rural banking and mobile banking at GM Bank, and meetings with teams responsible for the enabling regulation at the Bangko Sentral ng Pilipinas. The DAB delegation was also received by Deputy Governor of the Banko Sentral ng Pilipinas and AFI Policy Champion Nestor A. Espenilla, Jr., who was instrumental in leading the necessary reforms in the Philippines. The lessons learned from the exchange visit will help support and shape an evolving mobile banking regulatory approach in Afghanistan. The DAB recently published its regulation on mobile banking and entities will begin to seek licensing in the country. Coupled with experiences gained through initial pilot projects, the lessons learned from the exchange will also provide further insight on potential and performance to help mobile banking roll-out in Afghanistan. Asian policymakers agree to harness technology to expand financial access Bank Negara Malaysia has organized a Microfinance Policymakers’ Forum, held in Kuala Lumpur on 2-3 December 2009. Policymakers from 17 Asian countries participated in the two-day workshop, which was supported by CGAP and AFI. The Forum focused on how financial inclusion can be scaled up through the use of branchless banking, which involves moving beyond conventional bank branches using information and communications technologies and non-bank retail agents. Key themes covered at the workshop include recent developments in institutional structures as well as regulatory and supervisory requirements to support the effective adoption and implementation for branchless banking. For more information, visit http://www.bnm.gov.my/index.php?ch=8&pg=14&ac=1958. Experts share experiences on using the postal sector to expand financial access On 9- 10 November 2009, the Universal Postal Union (UPU) organized a two-day conference on financial inclusion and postal banking, supported by an AFI grant. The workshop, which was held in Bern, Switzerland, looked at how Posts could expand financial access to people living in remote areas of developing countries. With more than 650,000 post offices worldwide, many Posts, including those of Brazil, Russia, India, China and South Africa, are already filling an important void in this area. At the Forum, experts from around the world shared their experiences and discussed how Posts could become agents for expanding financial access to the poor. To view videos and presentations from this workshop, visit the page “Postal Financial Inclusion – the missing billion accounts”: http://postfi.wordpress.com/afi-upu-conference. AFI Steering Committee Holds its Second Meeting in Nairobi The AFI Steering Committee held its second meeting right after the Global Policy Forum in Nairobi. At the meeting, the Steering Committee identified key factors to the success of the Forum, including the high caliber of the policymakers who attended, the quality of the content of the discussions, the use of innovative formats such as fishbowls, and the unique opportunities offered for networking and knowledge-exchange. Steering Committee members also made concrete suggestions for next year’s Forum and identified key follow-up activities. These include using the upcoming AFI web portal to share policy papers and practical case studies to be written by our members, using virtual fishbowls to continue the dialogue, and conducting member surveys to assess member needs and identify ongoing financial inclusion initiatives. Other key outcomes include:
Finally, it was agreed that the next meeting of the AFI Steering Committee will be held in January 2010. Kenyan and Latin American policymakers share experiences on agent banking Supported by AFI, a group of Kenyan policymakers have completed a study tour to Latin America, where they discussed "correspondent" or agent banking models with their counterparts in Brazil and Colombia. During the visit, a team from the Central Bank of Kenya (CBK), the Kenyan Ministry of Finance and the Kenya Bankers’ Association met with policymakers and regulators, as well as commercial banks and agents to discuss regulatory frameworks for the implementation of agent banking. Some of the key lessons shared include the types of services that agents can provide, the selection and supervision of agents, and success factors and challenges. Field visits were also undertaken to provide first-hand experience on how agent banking works in practice. As part of a financial inclusion strategy, the Central Bank of Kenya is in the process of drafting new agent banking regulations, which will allow commercial banks to use third-party agents to as a delivery channel for financial services. The current legal framework restricts the use of agents by commercial banks. The lessons drawn from this study tour will offer valuable insights for CBK that will directly feed into the new agent banking regulations, to be implemented in January 2010. The Kenyan delegation also shared their experiences on regulating mobile banking, an area of current interest to both Brazilian and Colombian regulators. International workshop on increasing financial access through the postal sector Experts and policymakers from developing countries will meet to share experiences and identify key success factors in expanding financial access through the postal sector. At the workshop, which will be held in Bern, Switzerland in the second week of November 2009, Brazilian experts will share their success in transforming post offices into agents of commercial banks. Russia, China, and India will also share their approaches and challenges in delivering postal financial services, and recommendations will be made on how postal entities can be transformed into agents for expanding financial access for the poor. The meeting will be supported by AFI and organized by the Universal Postal Union (UPU), the global governing body of postal services and a United Nations specialized agency with 191 member countries. AFI Welcomes Members from 69 Countries Organizations from 69 countries have now joined or agreed to join AFI, representing more than 70% of the world’s unbanked population. Da Afghanistan Bank is the latest organization to become an official AFI member.
AFI Membership Climbs to 64 Countries 64 countries have now joined or agreed to join AFI, representing nearly 70% of the world’s unbanked population. Tonga and Solomon Islands are the latest countries to agree to become AFI members. AFI's first Global Policy Forum in Nairobi brings together policymakers from 40 developing countries 100 policymakers from more than 40 developing
countries, in addition to around 70 strategic partners, met in Nairobi
14-16 September for the first-ever Global Policy Forum of the Alliance
for Financial Inclusion (AFI). A year after AFI was established, the
Forum, co-hosted with the Central Bank of Kenya, provided a platform for
central banks and other policymaking bodies in developing countries to
share knowledge and experiences in expanding access to financial
services. The Forum succeeded in its objectives of building a vibrant community of
policymakers who feel free and able to share their knowledge of policy
solutions that work, and of drawing on the collective knowledge of AFI
members and strategic partners, including researchers, donors and the
private sector, to create a practical roadmap for moving forward. More than 60 Countries Form New Global Alliance to Increase Access to Financial Services The Alliance for Financial Inclusion brings together central banks and other partners, representing nearly 70 percent of the world’s unbanked. The global network will develop and implement policies to reach millions across the developing world by expanding access to financial services. NAIROBI, Kenya, Sept. 14 -- Nearly 100 central bankers and other financial policymakers gathered here today for the official launch of the Alliance for Financial Inclusion (AFI), a coalition of countries from the developing world committed to making savings accounts, insurance, and other financial services available to millions of people living on less than $2 a day. Research has shown that better access to financial services can fuel economic growth by raising national income via increased savings and investments in poor households as well as in small and medium enterprises. This access also enhances financial stability by injecting formal savings into the system, diversifying the capital base, and providing stability during global downturns. Yet, an estimated 2.5 billion people – over half the world’s adult population – do not have access to savings accounts and other financial services. AFI’s global network will enable developing countries to share knowledge so they can more effectively develop and implement policies designed to expand access to financial services. While many of the smartest policies to expand financial access have come from developing countries – such as mobile phone money transfer services in Kenya and agent banking in Brazil – knowledge of these solutions is scattered in pockets around the globe. “The unique aspect of AFI is that it puts us members in the driver’s seat to identify and create solutions to increase the availability and choices of financial services in our own countries,” said Tarisa Watanagase, governor of the Bank of Thailand and AFI member. “Since we understand our countries’ circumstances better than outside organizations, AFI creates an exceptional forum for us to share policies that work and learn from other policymakers about solutions that work for them.” AFI members gathered in Nairobi this week for the Global Policy Forum, a three-day meeting marking the coalition’s first-annual conference. Conclusions drawn at the forum will inform financial sector reforms, which members can consider for implementation in their nations. The Right Honourable Raila Odinga, Prime Minister of the Republic of Kenya, will open the conference, followed by presentations by governors and high-ranking representatives from central banks around the world. AFI members have chosen to focus on six policy areas to increase financial inclusion for their respective countries: agent banking, diversification of financial products and providers, state bank reforms, financial identity, consumer protection and mobile phone banking. “In Kenya we have pioneered innovative solutions like M-Pesa, a system of money transfer via mobile phones, that other countries can borrow and learn from,” said Njuguna Ndung'u, governor of the Central Bank of Kenya and AFI member. “In the same way we share a solution that has worked for us, we are looking to the AFI network to help introduce us to our next big idea, such as using agency models for financial service delivery.” Based in Bangkok, Thailand, AFI is managed on behalf of its members by the German development organization Deutsche Gesellschaft fur Technische Zusammenarbeit (GTZ) GmbH and supported with a $35 million grant from the Bill & Melinda Gates Foundation. “AFI’s peer-to-peer knowledge exchange model is playing a key role in amplifying policy solutions that work,” said Alfred Hannig, executive director of AFI. “The most realistic and successful solutions for including poor people in the formal financial system are being innovated among our members in developing countries.” This grant is part of the Gates Foundation’s Financial Services for the Poor initiative, which is working with a wide range of public and private partners to harness technology and innovation to make safe places to save and other financial services accessible to poor people in the developing world. “The demand for financial services – especially savings – is enormous in the developing world,” said Bob Christen, director of Financial Services for the Poor at the Bill & Melinda Gates Foundation. “AFI will help foster the spread of new and innovative efforts to deliver these services to the doorsteps of the poor so they can manage life’s risks and take advantage of life’s opportunities.”Media contacts: Alliance for Financial Inclusion About AFI Quick links: Sub-Saharan policymakers meet to share knowledge on financial inclusion Senior policymakers and regulators from the Southern African Development Cooperation (SADC) region have met to share knowledge and experiences in financial inclusion policies. The workshop, which was organized by FinMark Trust and sponsored by AFI, took place in Johannesburg on 27 August 2009. Delegates learned from each other’s experiences by sharing country strategies and on-going initiatives to promote financial inclusion. Discussions were also held on obstacles to broaden access to financial services and on which institution should have overall responsibility for promoting financial inclusion. The workshop concluded with some reflections on what AFI can do to assist the participating institutions to meet their financial inclusion objectives. Website for the 2009 AFI Global Policy Forum launched Are you going to the AFI Global Policy Forum this September? We have put together a new page where you can view the agenda, get to know the venue, and find travel information and other details. Take a look! > Sub-Saharan knowledge-sharing Senior policymakers and regulators from eight sub-Saharan African countries, each undergoing significant policy reforms, will be sharing their knowledge and experiences of financial inclusion policies and products at a workshop in South Africa on 27 August 2009. Some of the “hot” issues that will be discussed include microinsurance, branchless banking/e-money, anti-money laundering (AML) and credit market regulation, and social security reform. The eight countries include Ghana, Malawi, Mozambique, Namibia, Rwanda, South Africa, Swaziland and Zambia. The workshop will be funded by AFI and organized by the not-for-profit organization FinMark Trust (FMT). AFI Steering Committee holds its first meeting The AFI Steering Committee held its first meeting in Bangkok on July 10. At the meeting, members expressed strong support for AFI’s long-term vision to become an independent organization run and owned by policymaking institutions in developing countries. They decided that the Committee should be called the “Steering Committee” and proposed a two-tier membership structure for the AFI network. The draft AFI by-laws were reviewed by the members and will be finalized at the second meeting of the Steering Committee. • Tarisa Wantanagase, Governor of Bank of Thailand,
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