#1MAKING ACCESS POSSIBLE: Democratic Republic of the Congo Presentation of Results Presentation to stakeholders Kinshasa, 9 May 2016 FINMARK TRUST cenfri UN CDF Making financial markets work for the poor#2Agenda . • MAP approach . . . Why financial inclusion? State of financial inclusion . Consumer perspective Provider overview • Policies and regulation Where to focus? . Potential actions#3MAP approach#4To be determined July July May Diagnostic Research & Engagement Early insights drafting MAP Diagnostic research qualitative Country visit & in & FinScope Stakeholder buy j u q h h y y r Road map implementation Road map preparation Stakeholder presentation diagnostic Submission of Steering Com MAP Process: Where are we#5MAP: Where is the process being undertaken? Completed Botswana Myanmar Lesotho Malawi Swaziland Thailand Mozambique Zimbabwe Laos Underway RDC Zambia Nepal Madagascar#6MAP Process: Diagnostic inputs Uncover discrete target markets and needs cases Product and provider landscape (informal and formal) • * Demand FinScope 2015 Consumer interviews (2015) Household survey (INSS) • Survey 1-2-3 • S Ini Supply Interviews (2015) • Annual reports • • • Product data Mystery shopping FSAP (IMF) Financial inclusion priorities · Public policy objectives and regulatory context Regulation Interviews (2015) Regulatory and policy review#7Why financial inclusion?#8% of adults Why financial inclusion? Welfare improved with financial inclusion 70% 60% 50% 40% 30% 20% 10% 0% A large proportion of adults surveyed, with revenues of less than a dollar a day, indicated that they had to miss a meal, not send their children to school, or have not been able to pay their healthcare fees. 60% $0 - $30 Income Financially excluded adults (formal or informal) 12% 48% Financially excluded adults (formal or informal) Source: FinScope Consumer Survey DRC, 2015#9Why financial inclusion? Important role to enable government development objectives POLICY GOAL Improve welfare, stabilisation & human development Improve growth and employment . FINANCIAL INCLUSION ROLE . Improve reliability and speed of income receipts Improve efficiency of payments for goods and services Improve tools to manage risks and liquidity Enable asset accumulation for education & health and improve resilience to shocks Mobilise and intermediate savings for investment Enable financial services for Farmers and MSMEs • Attract remittances and enable diaspora financial services#10Kinshasa Context very tough for inclusion Kananga Kisangani Tshikapa Mbuji-Mayi Kolwezi Likasi Lubumbashi Goma Poverty and human development: HDI of 0,433/1,0 (176/188), GDP per capita of $442, GDP of $33bn Infrastructure constrained: . . Road infrastructures: 153 497 km (2,794 km paved) Population accessing electricity: 5% Big country: . 2.344.858 km² (country comparison to the world: 11) ~ 75 million inhabitants Reliance on agriculture: 55% rely on agriculture Informal economy: >9 in 10 depend on informal economy Young population: 60% under 20 years Ease of doing business constrained: 187/189 Ongoing conflict and security concerns Significant urbanisation & migration: 4% urbanisation, 9m live abroad Sources: FinScope (2015), Ease of doing Business report (X), PWC Africa Gearing Up Report (N/D), UNDP Human Development Report DRC (2014), World Bank (2016), CIA World Factbook (2016)#11Consumer perspectives#12Kinshasa Consumer perspective: Target markets - Kinshasa to deep rural Deep rural Rural Other urban Kinshasa 46% 75% 72% Secondary education 26.6% (highest for (highest for (highest for 41%) 56%) 55%) Average monthly $31.10 $58 $94 $118 income Kisangani Goma Own a mobile phone ?? 70% 83% 89% Heard of mobile Kananga ?? 18% 49% 57% money Tshikapa Mbuji-Mayi Average time to nearest bank ?? 2 hours 55 minutes 58 minutes branch Likasi Average time to ?? 2.5 hours 49 minutes 57 minutes Kolwezi Lubumbashi nearest ATM % of adult population 48% 28% 15% 10% Source: Authors own calculations based on FinScope 2015 & Résultats de l'enquête sur l'emploi, le secteur informel et sur la consommation des ménages, 2015 No. of adults in N/a 11 million 6 million 4 million FinScope#13Consumer perspective: Low take-up of financial services - significant opportunity to extend South Africa 2014 75% 5% 5% 14% Even wealthy are excluded Uganda 2013 20% 34% 31% 15% Kenya 2013 32% 34% 7% 25% • ~ 900k adults: earn more than $200 pm Swaziland 2014 54% 11% 10% 26% Rwanda 2012 23% 19% 30% 28% with no formal access Namibia 2012 62% 3%4% 31% • ~1.5 mil: earning Tanzania 2012 12% 40% 17% 31% between $100-$200 pm with no formal access Half of those with accounts use them only once a month or less Nigeria 2014 36% 12% 12% 40% Malawi 2014 27%7% 7% 14% 52% DRC 2014 12% 24% 13% 52% 0% 10% Banked 20% 30% 40% 50% 60% 70% 80% 90% 100% Other formal Informal Excluded No. of Adults 2.3 m 5.0 m 2.6 m 10.5 mil Source: Authors own calculations based on FinScope 2015 & Résultats de l'enquête sur l'emploi, le secteur informel et sur la consommation des ménages, 2015#14Consumer perspective: Savings most common, remittances. drive formal up-take Insurance Remittance 24% 7% Credit 3% 5% Savings 7% 3% 17% 29% 0% ■Bank 99% 92% 66% 45% Gender* Female 20% 40% 60% 80% 100% Other formal ■Informal Fam Friends Excluded Male Location* Kinshasa Other urban Rural *Gender and Location split for individuals indicating that they have any type of product within the specified category Source: Authors own calculations based on FinScope 2015 & Résultats de l'enquête sur l'emploi, le secteur informel et sur la consommation des ménages, 2015#15Consumer perspective: Income, gender, geographic, target market Banked Other formal Informal Family and friends Excluded Income $ Gender ** High income >$100 20% 34% 11% 17% 18% Female 10% (10,724,133) 19% 12% 23% 36% (5,618,132) Low income <$100 8% 17% 15% 25% (11,451,352) 34% 0% 20% 40% 60% 80% 100% Geographic location Male (10,971,653) 13% 23% 15% 22% 27% 0% 20% 40% 60% 80% 100% Farmers vs. Traders Kinshasa 20% 25% 13% 16% 26% (6,493,780) Farmers 4% 16% (6,855,399) 15% 29% 36% Urban 17% 29% 9% 19% 25% (3,812,698) Rural 5% 16% 15% (11,389,308) 0% 20% 40% 28% 37% 60% 80% 100% Traders 13% (6,188,414) 25% 18% 18% 26% 0% 20% 40% 60% 80% 100%#16100 90 80 70 60 50 Percentage of population 40 30 20 10 0 for? Consumer perspective: what do adults use financial services Send internationally Save for old age Send Domestically Receive Salary Receive Remittance Payments Savings House(s) Encashment Productive Inputs Credit Insurance Loss mitigation Combined Education Health Payments for goods... Source: Authors own calculations based on FinScope 2015#17Consumer perspective: Experience with formal financial services is problematic It's too far away Not for me I don't trust it "[Bankerisation] It is not so good, it obliges us to not go to work, because we need so much time. And not only for ourselves, I also know friends in the province that require us to collect for them here. I am practically the second signatory for two or three people who live in the province" "Banks are reserved for rich people who have lots of money." "There is no confidence in the banks and cooperatives because they have lost their money in those sectors. Personally, I have a little confidence." It's doesn't work "Although I am paid via my bank, I do not save other there because there are too many problems to get my money. That is why I keep my money in a shop somewhere around me, not far from my house, because the bank is a long distance away, too conventional, and too many connection problems." I waste my time "I dislike, no, I am disgusted by queuing. With banks, you'll arrive there, and you will wait for two, three, maybe five hours. And time is money." I am confused "In Kinshasa we don't know how banks work." TAXI Formal FSPS ATM 00 BANK#18Consumer perspective: Key barriers to financial inclusion Access Barriers Usage Barriers Barrier Severity Discussion Barrier Severity Discussion Need to travel > 60 minutes to nearest Bank, ATM, supermarket; Too complex: 69% Proximity High Capability High Severe connectivity limitations hamper financial infrastructure Hassle High Factor Reliability High Cannot understand: 71% Complex language: 67% - 3.5 4 hrs bank queue; difficulty claiming insurance History of financial shocks resulting in loss of funds, limited trust in insurance claims Eligibility Medium 23% of Congolese do not have access to an electors card, the primary identity document. Other forms of documents are owned by <10% of adults. Trust High 60% are unaware of mobile Awareness Medium 60% are unaware of insurance Transaction cost limited barrier compared to others Cost Low High degree of need exists Need Low Source: Authors own calculations based on FinScope and qualitative interviews 2015#19Provider overview#20Provider overview: Evolution of the financial services environment in the DRC Central bank established Provider enters market Financial sector legislation Microfinance Law Credit establishment law SACCO law 2011 2002 MTOS enter market Rawbank enters 2001 TMB enters 2004 ProCredit enters retail market 2005 Rapid account growth: 2.3 million accounts Mobile money kicks-off (M-pesa, Tigo cash, Airtel) 2012 Orange offers mobile money 2015 1980 | 1983 | 1986 | 1989 | 1992 | 1995 | 1998 | 2001 | 2004 | 2007 | 2010 | 2013 | 2016 | → Hyperinflation: Savings destroyed Collapse of banking system Conflict: infrastructure destroyed Macroeconomic stabilisation Agency law Payments law#21250 200 150 100 Provider Overview: Rapid growth in providers, accounts and balance sheet Evolution of the number of players in the banking and finance sector in the DRC No. of Institutions Evolution of the number of accounts in the banking and finance sector in the DRC Millions of accounts 50 18 0 7 Evolution of deposits and loans in banking and finance Millions 15 8 Exchange Bureau 4000 7 Only 10% are used 6.8 3500 3364 67.2% 55 MTOS 6 3044 3000 2688 5 SACCOS 4 2500 59.9% 60.4% 2032 2000 1807 1825 119 MFIS 3 2.5 2.5 1500 2 1.9 1.9 2 Specialised 1 Financial 0.40.5 0.1 23 Institutions 0 7 Banks 1997 2009 2013 Banks 2013 MFIS, SFIS, SACCOS 1.5 1000 49.5% 500 9748 0 1997 2009 2013 2014 2014 x% Mobile Money Savings Credit Credit/Savings 1997 14 18 Source: Banque Centrale du Congo#22Provider Overview: Concentration in top 5 Banks, returns constrained Share of Total Assets (%) Share of Savings (%) Share of Credit (%) ROE (2014) 50% 40% 30% 20% 10% 0% Rawbank BCDC -10% -20% Concentrated: 60% of total assets TMB Limited returns: <20% BIAC FBN Bank All other banks Source: Banque Centrale du Congo#23Number of adults Provider Overview: Who provides what to whom? Crédit Épargness 14 000 000.00 Assurance Transactions Revenu moyen $200 $180 12 000 000.00 10 000 000.00 8 000 000.00 6 000 000.00 4 000 000.00 2 000 000.00 $160 $140 $120 $100 $80 $60 $40 $20 { 0.00 $- Informel Famille et COOPEC amis IMF Agence de Transfert Banque No. of institutions N/A N/A 26 21 75 18 Argent Mobile 3 Assurance 1 Rural Location Source: Authors own calculations based on FinScope 2015 & Résultats de l'enquête sur l'emploi, le secteur informel et sur la consommation des ménages, 2015, Banque Centrale du Congo Other urban Kinshasa Average monthly income (USD)#24Policy and regulation#25Policy and Regulatory Overview Comprehensive Financial Inclusion Policy needed as part of a national growth policy OHADA (Organization for the Harmonization of Business Law in Africa) integration is a significant driver Strong awareness, commitment and resolve for financial inclusion Regulators progressing despite scarcity of resources . • • . • • • There is currently no consolidated policy on financial inclusion, yet elements are present in other policy documents. There is a need for the joint development of an integral financial inclusion policy as part of a wider economic growth agenda The adoption of harmonized business law has had a significantly beneficial impact on the re-development of financial services and has enabled elements of the regulatory system to leapfrog developmental cycles and better align with regional and international norms Continued regulatory reform in line with OHADA opens the possibilities for greater regional and continental integration A widespread awareness of the benefits of the broadening of financial services with both government and private sector Strong evidence of the commitment and resolve to build an inclusive and stable financial services sector by regulators Sincere commitment to inclusive market development by private FSPs Well coordinated and cooperative donor community Progress towards financial inclusion has made great strides with some of the largest G2P programmes Limited resources available to regulators due to state budgetary constraints, a capital intensive developing financial sector and the limited use of the national currency#26Broader Regulatory Environment Timing of regulatory instruments Quality of legislation and regulations Limited access to justice and dispute resolution mechanisms • • • • • The time taken to formulate and pass legislation and regulations is always a contentious issue and although a prudent step to avoid rash decisions, but a long incubation period of legislation can inhibit and sometimes undermine the momentum and viability of the financial services sector; e.g. Insurance regulations, NPS Act and Agency Law More principles based legislation with greater reliance on expertise of regulators with broader delegated legislative discretion would enable considered and timely responses to drive and safeguard financial service development. There is no consistency in drafting quality of financial legislation. It varies from superbly drafted and well structured to poorly drafted and tangential In a civil law system, there is utmost reliance on precise drafting with limited variance for interpretation through a consistently high standard of drafting The advancement of financial services strongly relies on both FSPs and Consumers being able to resolve disputes and enforce contracts Courts need technical assistance in the resolution of financial services matters Effective access to courts and alternative dispute handling mechanisms is limited beyond Kinshasa which would limit growth only to nodes of effective justice, particularly with regard to the extension of Credit Customary courts are a potentially widespread point of low value financial dispute handling but would require training#27Regulatory constraints Credit requirements increases cost and risk, limited consumer protection . • • Consumer protection principles not harmonized across institutions, including standards on fees and effective interest rate disclosure and over-indebtedness No mandatory requirements to share credit information Collateral realization problematic, increases risk and cost (>90% of claims lost, 80% of claims go to cost to enforce). Title deeds problematic. No population register or identity documents increasing cost, risk and access. Tax provisions against non-performing loans drains cash flow whilst increasing cost and incentivizes under reporting of doubtful debts. Proportional prudential requirements needed for lower tier banks and non- deposit taking MFIs as it severely hampers lending at smaller scale Demarcation between banks and MFI client bases negates business case for MFIS#28Regulatory constraints Payments AML/CFT to be updated for FATF 2012 requirements in inclusive • National payments needed to ensure fair access, certainty and improve interoperability More comprehensive e-Money framework needed, including equal access to telecoms and payments platforms for MNOS and financial service providers. Status of trust accounts unclear, possible attachment by creditors. Prudential requirements not in line with the proportionately low risk; barrier to competition Simplified CCD allowed for single transactions<$10k, but not accounts FATF 2012 poses risk of exclusion if not implemented with care, effective guidelines key#29Regulatory constraints Regulation in transition Insurance code not principles based, will hamper access, reinsurance and innovation Significant new regulation/ policies underway. Some uncertainty on implementation. • • • Promulgation of the Insurance Code and liberalization. Regulation on leasing. Agency banking regulation under preparation. Payment system regulation. Credit bureau De-dollarisation Law is not harmonized with international standards (IAIS, OHADA), will limit entry & hamper reinsurance. Innovation severely constrained. Law is too detailed & prescriptive for an insurance law, not sufficiently principles based Micro-insurance is not provided for & cannot be accommodated under specified rules of the law, leading to exclusion of largest portion of the Congolese market.#30Regulatory constraints Proportionate prudential requirements on non-deposit taking MFIs and eMoney service providers needed • Proposed prudential requirements on non-deposit taking high relative to risk to borrower. Current limits likely to reduce formal MFI credit extension. eMoney services will struggle to grow to scale without prudential requirements proportionate to the risk; will drive down competition and distribution#31Regulatory constraints Ease of doing business constrained • No access to investment support for financial service providers • • • • Some progress, still difficult environment to set up and manage business Enforcing claims problematic Uncertainty on tax arrangements Investment incentives available to other businesses, not to financial service providers. Could assist to overcome business case constraints to serve excluded. Still contractual constraints on married women . Despite not commonly enforced, married women still require husband's authorization to bind the estate. Includes financial contracts.#32Where to focus? Making financial inclusion matter to more people#33Long term priorities key for full inclusion Growth in income and opportunities • Extend infrastructure to improve distribution footprint . Enable entry of more players to pool funds and offer long term options Address business and contractual environment Will take time to fully address: leverage partnership and technology to improve inclusion#34Priority Areas 1. Improve reliability and convenience of payments 2. Leverage remittances to attract and share resources 3. Build trust to save 4. Unlock intermediation for opportunities 5. Improve risk management for viable consumers 6. Strengthen institutions for inclusion#351. Improve reliability and convenience of payments#36Use of cash pervasive, digital options limited 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Rent Water Airtime Electricity Food School fees Debit or credit card Bank transfer Cash Mobile phone ■Pay in kind Other Source: Authors own calculations based on FinScope 2015#37Even those with accounts seldom use them Bank only: 2.1 mil Both: 450k Mobile Money only: 470k 2.5m Location Frequency Gender गि* 123 पेसे Rural: 26% Urban 20% Kinshasa: 53% 41% use Male Female once a month or more Rural: 15% Urban 48% Kinshasa: 37% Male Female Rural: 30% ~600 000 Male Female Urban 41% 920k Kinshasa: 29% use once in 90 days Source: Authors own calculations based on FinScope 2015 & Résultats de l'enquête sur l'emploi, le secteur informel et sur la consommation des ménages, 2015#38Distribution foot print extremely limited, unreliable and inconvenient "Although I am paid via my bank, I do not save other there because there are too many problems to get my money. That is why I keep my money in a shop somewhere around me, not far from my house, because the bank is a long distance away, too conventional, and too many connection problems." Male, employee of a private company in Kinshasa Only 8000 mobile money agents are active Description DRC Angola Brazil ATMs per 100,000 adults, Number 1,14 22,97 129,25 ATMs per 1,000 km2, Number 0,19 2,08 23,86 Commercial bank branches per 100,000 0,82 12,86 47,32 adults, Number Commercial bank branches per 1,000 km2, Number 0,14 1,16 8,74 Active mobile money 32 000 No data No data agents (active) Source: IMF FAS (Financial Access Survey)#39Existing footprint not connected and costly to use Domestic (Within the DRC) Operational payment service providers Settlement Private Banks and clearing RTGS MNOS and mobile money Abroad (Outside the DRC) SIRESS MasterCard Visa Correspondent Banks etc#40Mobile money is a new option: But knowledge, footprint, and trust constrain usage 6.8m Registered mobile money users ~600k Active users Why do you not use electronic payments? 10 000 000 9 000 000 8 000 000 7 000 000 6 000 000 5 000 000 4 000 000 3 000 000 2 000 000 1 000 000 0 Not informed No access Trust Not enough money I don't know#412. Leverage remittances for risk and opportunities#42Total: 2.5m Substantial remittance flows critical for survival 1 300 000 Remittances (formal & informal): 5 400 000 340 000 110 000 285 000 Banks: 811 000 Total: 920k Total: 7.3m • Remittances large and infrequent - often for risk or school fees Remittances largely through MTO and informal channels Cross border . . Values significant. $9bn total flows into DRC (45% of GDP) from 9m people, very different from total formal figures of $22m remittances Formal options limited and expensive Documentation and bank relationships in receiving countries difficult Mobile Money: 190 000 FinScope 2015, World Bank 2015, Ministry of Congolese Abroad (2015)#433. Build trust to save#44Low confidence in formal financial institutions 100 90 80 70 60 50 Would you trust a formal financial institution? "I prefer to get money from a Riba than a bank. They are faster and less formal. I have no guarantee from a bank and they do not. help me repay my loan." "Banks, they will steal my money, that is what I think. A bank receives many advantages when I save there. With the bwakisa carte, I also have advantages!" 40 30 22 20 10 0 Bank MFI SACCO No Don't know FinScope 2015 44#45Number of adults Critical to enable savings to mobilise capital 1 600 000 1 400 000 1 200 000 1 000 000 What do you use your account for? More than twice as many people use accounts to save than there are those who draw out all at once 11.7 million adults save, but only 2 million adults keep their savings in accounts. 800 000 600 000 400 000 200 000 0 To save To keep money Draw out all at safe once wages loan Get to salary or To get credit or To make payments or get money 45 FinScope 2015#464. Unlock intermediation for opportunities#47Millions of adults Market for productive retail credit Value chains constrained which impacts credit opportunity, however productive credit options remain 2.3 mill adults earn > $ 200 per month < 9% have credit Small businesses 2.5 1.5 0.5 0 1 2 Agriculture Other > US$ 200 91% > US$ 200 9%#48Credit provision very limited and short term Domestic credit provided by financial sector (% of GDP) 2006 2009 2014 Brazil DR Congo 82.9 93.4 2.9 0.8 108.3 8.6 South Africa 171.5 182.2 185.6 Domestic credit to private sector (% of 2006 2009 2014 GDP) Brazil DR Congo South Africa 35.4 2.1 146.1 52.8 69.1 5.4 6.2 149.5 151.5 Agricultural value chains constrained by credit. Farmers interviewed produce lettuce as the maturity of the crop matches the maturity of the farmers debt.#49Dependent on short term small deposits, institutional investors limited Commercial banks largest deposit takers. Largest depositors: high income, urban population; civil servants; state officials; army. More than half of deposits concentrated in Kinshasa. Nearly 30% of 278 bank branches (2013) located in Kinshasa. Savings typically short term in nature - difficult to form long term assets. 7% 4% 13% 76% Liabilities of the banking system (2014) Savings Interbank funding and BCC Other I Capital and reserves#50High costs, liquidity requirements and contracting constraints limit extension and restrict term 43% 10% 1% 46% Cash and Banks Securities Net credit Other Assets of the banking system (2014) Banks • Very high cash: 46%, not intermediated • Loan-deposit ratio: 59% (low by international banking standards). • High NPL ratio: over 8% for most (5% average for Sub-Saharan Africa) • Average bank cost to income ratio of 74% MFIS and SACCOS • MFIS and SACCOS' PAR30 12.4% (maximum standard 5%). • MFIs average: 2% (understated) • SACCOS average: 24.7%#51Develop capital market: Unlock saving, pooling and investment constraints to drive opportunities Savings Capital pooled Investment $ S $ Build trust to save & enable payments Strengthen pooling options Reduce cost and risk to invest#525. Improve risk management for viable groups#53Health spending and food largest drivers of credit, emergency credit can protect against poverty Reasons for borrowing To extend or renovate or repair a house Don't know Cell phone, laptop or computer Other Own education To build a house Gift Monthly fees Bills, e.g. rent, electricity Clothes Give to another family member Child's education Start or invest in your own business Food House Medical Spending 0 5 10 15 20 25 25 >25% use credit for food 30 Percentage of those with credit 35 40 40 45 >40% use credit for house and health spending 50 FinScope 2015 53#54More than 4m sell assets or reduce consumption to manage risk Other | Increase in HH size Fire or destruction of property Flooding/storms Loss of access to water Theft Other family loss of income Main earner loss of income ~4m adults: Sell something or reduce consumption for insurable event • ~60% of adults: insurance is worth the cost and improves peace of mind . ~1m adults: Insurer will not pay out claims • ~1m adults: Do not understand insurance 200k adults: consider themselves insured Informal options such as mutualitee and mutuelle fulfill critical needs to manage risk 0 1 000 2 000 3 000 4 000 5 000 6000 7 000 8 000 9 000 Milles Claimed insurance Used savings Borrowed money Sold something to get money Other (SPECIFY) Don't know Nothing Finscope, 2015#55Insurances: New area, typical retail insurance market development to scale Agents Target new markets : individuals sales = Product & process design Brand Partnership Access to voluntary groups Compulsion Target new markets = voluntary groups Stage 1: Compelled groups Stage 2: Voluntary groups Stage 3: Individual Sales#566. Strengthen institutions for inclusion#57Strengthen Institutions and Regulation for inclusion . . . . Financial service skills and technology constrained Data extremely constrained to identify opportunities and manage risk: no credit reference bureau and public data on FS market limited Critical regulatory constraints increases cost and risk to provide Address institutional gaps: • Payment system interoperability • Capital market & institutional investors • Functional credit reference bureau • Identity system Introduce financial inclusion policy to strengthen mandate#58Towards a roadmap#59Potential actions for inclusion Priority 1. Improve reliability and convenience of payments Potential actions • Improve reliability of ATMs and POS devices • Enable payment system interoperability and SIRESS • Enable agency and alternative payment partnerships • Improve use cases for digital payments, value chain digitisation Consider investment incentives to extend footprint . . . • . 2. Leverage remittances for risk and opportunities ● Connect distributors with broader FS services Extend cash reticulation Deepen bancerisation to go beyond ownership to usage Enable offline card technology to accommodate connectivity challenges Develop cross border corridors Address first mile issues to send with sending countries . Create formal options for trade flows Enable targeted send options for human capital (e.g. health and education) Address last mile payment constraints#60Potential actions for inclusion Priority 3. Build trust to save Potential actions Continue to drive stability of savings institutions 4. Unlock intermediation for investment • Address payments constraints to improve reliability • Improve capacity of frontline staff to sell ● . Strengthen enforcement to terminate illegitimate savings institutions Strengthen consumer protection and recourse • Consider deposit insurance ● . Address payment constraints to improve receipt of saving and liquidity available for lending Strengthen SACCOS and MFIs to collect and secure savings ● Connect informal options with formal institutions • Address credit related regulation constraints ● • Strengthen consumer data - e.g. credit reference bureau Develop capital market, financial instruments and long term pooling options#61Potential actions for inclusion Priority 5. Improve risk management for viable groups 6. Strengthen institutions and build consumer capability Potential actions • • Address regulatory insurance constraints to enable entry and provision for key groups - employed and business Develop emergency credit options Introduce financial inclusion policy Address data constraints (including credit reference bureau) Address regulatory constraints Build financial sector infrastructure Strengthen financial sector skills Strengthen consumer capability#62Thank You! Cenfri (The Centre for Financial Regulation & Inclusion) is an independent think tank based in Cape Town. Our mission is to support financial inclusion and financial sector development through facilitating better regulation and market provision of financial services. We do this by conducting research, providing advice and developing capacity building programmes for regulators, donors, financial service providers and other parties operating in the low-income market. In collaboration with key partners and funders we actively engage across Africa, Latin America and Asia. Please contact us at... Mia Thom E-mail: [email protected] Brendan Pearce E-mail: Brendan [email protected] Monah Adriambalo E-mail: [email protected] Henri Plessers E-mail: [email protected] Barry Cooper E-mail: [email protected] Jaco Weideman cenfri The Centre for Financial Regulation & Inclusion www.cenfri.org E-mail: [email protected]