Financial & Private Sector Development

Financial Inclusion Support Framework

April 2014

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Countries with headline commitments to financial inclusion

• Over 50 countries have headline commitments and targets, including through the Maya Declaration, and G20 Peer Learning Program for Financial Inclusion (Los Cabos 2012, Mexico G20 Presidency).

• The UN Secretary General’s High Level Panel on the post-2015 MDGs recommended bank accounts for women and universal access to financial services as enabling targets

• Partners to countries in making and meeting FI targets include:

Financial Inclusion: Global Momentum

countries >80

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• The World Bank Group offers a comprehensive set of instruments to support policy and legal reforms, financial infrastructure, guarantee mechanisms, regulatory standards, financing platforms, and financial sector investment & innovation

• Instruments include financing, policy advice, data, and technical assistance. • Financing, technical assistance, diagnostics and advisory services in >80 countries

MENA region Technical assistance

through WB-IFC MENA MSME facility

Nigeria Housing Finance and DFI Projects, Data & Research

to inform FI policies

Mozambique CPFL Diagnostic, Support

to FSD/FI Strategy, Mobile/Innovative

Payments Technical Assistance

Indonesia Data, analysis and advisory

inputs to support Government/Regulator-led

FI reforms, inc. for innovative payments and

financial education

Jordan SME Finance diagnostics leading

to TA and investment loan, Advisory services for financial

infrastructure

Global Principles, technical guides ,

survey data, research

Tunisia, Egypt Post-revolution financing and TA to support MSME

sector

The World Bank Group and Financial Inclusion

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Financial Inclusion Support Framework

Country Support Programs

Technical assistance and capacity building programs for up to 20 countries. First programs are in

Indonesia, Mozambique, Rwanda

Financial Inclusion Challenge

Research and Models

Agricultural finance, women and finance, impact and cost

effectiveness of FI reforms

Results-based financing to accelerate financial sector

response to FI reforms.

Launched in April 2013, to offer comprehensive, multi-year support for achieving national strategies and targets. Builds on and leverages WBG capacity, and offers national lead agencies a mechanism for scaled-up and coordinated assistance aligned with their priorities. FISF is comprised of three components:

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Scope of FISF Country Support Programs

Sectors supported will be determined by country priorities and by diagnostics/data analysis, and may include:

e.g. Agricultural insurance, supply chain finance

Microfinance, SME Finance, Housing MF

e.g. Innovative Retail Payments, G2P payments,

Remittances

Payments Agricultural

Finance Micro & SME

Finance

Financial education, financial literacy

e.g. Market conduct supervision, disclosure of

information

Secured transactions, credit information, UIDs

Financial Infrastructure

Financial Capability

Financial Consumer Protection

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Example: G2P Payments and Financial Inclusion

Access G2P or CCT transfers are made through an account. The beneficiary now owns and accesses the account to receive the payments.

Usage The beneficiary uses the account not only to receive payments, but also to conduct transactions, save, and get access to other services.

Quality The beneficiary knows his rights and obligations and is capable of shopping around for the best products and services that best suits his/her needs.

ID systems help with KYC requirements.

Competitive financial markets with barriers to serving low-income consumers removed.

Regulated savings accounts.

FISF enables Transformative Approaches

Transactional instruments such as mobile wallets and cards.

CPFL programs help inform and protect consumers.

h CCFinancial infrastructure allows consumers to build credit information.

Example: Financial Consumer Protection/Capability

FISF enables Transformative Approaches

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Reduced information asymmetry Opens up beneficial access to finance – Individuals and enterprises can select products and services which meet their needs and objectives, while fully understanding their cost, terms and conditions.

Increased financial capability An increasing number of countries are developing financial literacy/education strategies, aiming at improving consumers’ levels of financial knowledge and awareness.

Enhanced consumer protection Consumers are protected from possible market abuses, competition is encouraged, and trust in the financial sector develops, encouraging financial inclusion.

Expanding access to financial services

in a responsible manner.

Catalytic Technical Assistance 1. Data, knowledge, in-depth diagnostics – to underpin evidence-based policymaking

2. Experts, Advisory Inputs, Knowledge-Sharing – to ensure effective and timely reforms 3. Training, Capacity-Building – to enable governments & regulators to accelerate reforms

Program of Policy Reforms, Regulatory measures,

Initiatives

Investment and Innovation – expanding financial access

Private sector (supply-side) response leading to – wider range of financial products, expanded clientele (lower income clients, higher proportion of women), more transparent and

competitive markets, MSMEs better able to finance trade, jobs, and growth.

INFORMS

ENABLE AND PROMOTE

ENHANCED BY FINANCING, ADVISORY SERVICES & TRAINING TO FINANCIAL SECTOR

National Financial Strategies

INFORMS

SET OUT IN

ENABLE AND PROMOTE

FISF: harnesses range of cross-WBG expertise & products (modelled on design of Indonesia program)

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Country Selection How can countries benefit from the FISF? After receiving a request for support received from their lead entity for financial inclusion (e.g., Central Bank, Ministry of Finance), countries will be selected for assistance using the following criteria:

Significant level of country commitment to financial inclusion and financial literacy through a national commitment and/or national targets. Si

1 Commitment to financial inclusion

Dedicated capacity and lead counterpart D2 Dedicated financial inclusion capacity in a financial regulator (or MoF), and ideally some form of national coordination framework.

Potential for impact P3 Potential for progress and impact, and clear need for FISF support (not duplicating existing programs) .

4 Approval by FISF Steering Committee

Relevant Knowledge Resources for FISF

Responsible Finance Website

responsiblefinance.worldbank.org

FI Strategies Reference Framework

bit.ly/FIStrategiesReferenceFramework

Global Survey on Innovative Retail Payments

worldbank.org/financialinclusion

Good Practices for Financial Consumer Protection

bit.ly/GoodPracticesConsumerProtection

Financial Inclusion Indicator Monitoring

http://datatopics.worldbank.org/g20fidata/

Financial Inclusion Strategies Resource Center

worldbank.org/financialinclusion