PAYMENT ASPECTS OF FINANCIAL INCLUSIONTHE WORLD BANK EXPERIENCE IN IMP - PDF document

1 PAYMENT ASPECTS OF FINANCIAL INCLUSIONTH
PAYMENT ASPECTS OF FINANCIAL INCLUSIONTHE WORLD BANK EXPERIENCE IN IMPLEMENTING PAFIMarco NicolìSr Financial Sector SpecialistDecember 2018 World Bank CPMIPayment Aspects of Financial Inclusion (PAFI)��1&#x/BBo;&#xx [2;.72; 11;.16;† 6;•.9;ʑ ;ř.;㖆&#x ]/S;&#xubty;&#xpe /;oot;r /;&#xType;&#x /Pa;&#xgina;&#xtion;&#x 000;&#x/BBo;&#xx [2;.72; 11;.16;† 6;•.

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5 serve as a gateway to other financial s
serve as a gateway to other financial services The task force The Vision 2 ��The PAFI approach PAFI AS ANALYTICAL UNDERPINNING FOR UFA 2020World Bank Group Universal Financial AccessBy 2020, 1 billion adults who currently are not part of the formal financial system will gain access to a transaction account through targeted interventions The PAFI experienceDiagnostics: feedback from the assessors PAFI framewor

6 k as analytical toolAlbania, Brazil, Chi
k as analytical toolAlbania, Brazil, China, Cote d’Ivoire, Congo DR, Egypt, India, Indonesia, Kyrgyz Republic, Madagascar, Mexico, Pakistan, Rwanda, South Africa14 COUNTRIES COVERED BY PAFI DIAGNOSTICSFLEXIBLE APPROACH Standalone full assessmentsComponent of broader diagnostic (e.g. FSAP)Modular diagnostic Lessons learned /1 A useful analytical tool A standardized diagnostic framework Defined scope, structure Useful to

7 design strategies and projects Facilita
design strategies and projects Facilitates crosscountry comparison Lessons learned /2 Refining the methodology Template developed, adopted for full assessments Need for additional guidance on how to assess some of the Principles Adapting the scope to client’s needs Limited leverage / depth in some areas (e.g. ICT) Lessons learned /3 Challenges Undertaking a comprehensive reviewFormulating practical recommendations for

8 authorities Guiding Principle 4 (produc
authorities Guiding Principle 4 (product design) Lack or insufficient depth of data Guiding Principle 5 (access points) Lack of baseline data to measure effectiveness of literacy effortsNo systematical mapping of financial education programs Guiding Principle 6 (financial literacy) Need for indepth assessments for each payment stream Guiding Principle 7 (largevolume, recurrent payments) Ideas for a Guidance Note for PAFI d

9 iagnosticProvide additional guidance and
iagnosticProvide additional guidance and methodologyMore consistency, comprehensivenessFill gaps for areas where detailed guidance is not availableDeeper coverage of emerging topics (e.g. role of FinTech)Collect and showcase good practicesLiving tool / digital format The PAFI experienceReforms Reforms / actions triggered by PAFI Guiding Principles Legal and regulatory reformsCentral bank laws amended to increase power to re

10 gulate/oversee retail payments, financia
gulate/oversee retail payments, financial inclusionBanking (or other relevant) laws amended to allow/strengthen role of nonbanks in payments marketKYC regimes revised to allow tiered accounts structure, riskbased approach StrategiesNational Retail Payments StrategiesRole for authorities beyond central bank (e.g. education, IT infrastructure, taxes, identification) Analysisdepth studies of Government payments and collection

11 sIncentives for electronic payments acce
sIncentives for electronic payments acceptance PolicyReview of agent banking models to expand reachID reforms / digital ID CapacityNew territory for some central banks: need for capacity building Implementing PAFIWorld Bank Group support FINANCIAL INCLUSION GLOBAL INITIATIVEFinancial InclusionGlobal Initiative (FIGI), funded by Bill and Melinda Gates Foundation, launched in 2017Design based on the PAFI framework3 Country Pr

12 ograms informed by PAFI diagnostic:China
ograms informed by PAFI diagnostic:China, Egypt, Mexico Support the design and implementation of over 30 National Financial Inclusion Strategies (NFIS) Mozambique (2016)Zambia (2017) Pakistan (2015)Mexico: Pilot application of new technologies to ID systems (FIGI, 2019 South Africa: Retail Banking Diagnostic to identify potential lack of fair treatment in provision of transaction accounts and fixed deposits (SECO, 2018).

13 Madagascar: Lending operation supporting
Madagascar: Lending operation supporting establishment of a centralized electronic collateral registry. West Africa: IDA financing for Regional Identification Program (WURI) to build an ID system covering all persons in the ECOWAS territory Morocco: Implementation of an ID system in Morocco with focus on beneficiaries of social protection payments Bangladesh: Assistance in drafting mobile money regulations and payments ov

14 ersight framework (HiFi). Jordan: Suppo
ersight framework (HiFi). Jordan: Support setting up regulatory sandbox for Fintech. Colombia: Support design of handling processes and SupTechsolution for consumers’ complaints. Mexico: Support design of consumer protection regulatory framework under Fintech law (FIGI, ). How the World Bank Group is supporting countries in the implementation of the PAFI guiding principles Foundations Critical enablers Madagascar: S

15 upport MFIs to offer digital financial s
upport MFIs to offer digital financial services. Innovation fund to support adoption of Fintech solutions Mozambique, Pakistan & Ethiopia: study geospatial data, map access points, identify gaps and optimize distributionMexico: Financial literacy mapping and gap analysis of public sector initiatives (FIGI, in progress)Mexico: Landscape study of social benefit programs (FIGI, in progress)Pakistan: Financial education mapping

16 report and roadmap to improve financial
report and roadmap to improve financial education delivery (FISF, 2018) Ethiopia: Financial capability survey (leading to a Financial Education Strategy (FISF, Western Balkans: Project Greenback 2.0 financial literacy program focused on remittances (SECO RPP, 2016 Egypt: Restructuring Egypt Post financial services to better utilize its outreach for FI (FIGI, in progress) Bangladesh: Retail payments cost study (HiFi Pakis

17 tan: Digital transaction account scheme
tan: Digital transaction account scheme Mozambique: Social protection payments assessment leading to a lending operation (FISF, 2018). Pakistan: Support the digitization of major social benefit transfers programs Catalytic pillars Drivers of access and usageHow the World Bank Group is supporting countries in the implementation of the PAFI guiding principles Thank youMarco NicolìSr Financial Sector Specialistmnicoli1@wor