A Guide to Financial Inclusion in Fragile States

Wednesday, November 11, 2015

Start with aid: At USAid we are looking for ways to convert traditional aid delivery models, such as commodities and vouchers, into cash transfers that are delivered in ways that encourage recipients to access safe, basic financial services. Kay McGowan, digital finance advisor, USAid, Washington DC, USA @KMcGowan@GlobalDevLab

Learn from previous crises: Before the Ebola crisis, the Central Bank of Liberia relaxed mobile money regulations. This policy change made it easier for some Ebola workers to be paid on time, electronically, and facilitated a 300% increase in person-to-person payments to support people in quarantined areas. John Tucker, deputy director of financial inclusion, United Nations Capital Development Fund (UNCDF), New York, USA @UNCDF

Know your limits in a difficult operating environment: Often building out the infrastructure needed to provide financial services is complicated. For example, in Afghanistan, the push is to drive mobile-enabled agent banking into rural areas, but often those areas can be insecure. Kay McGowan

Ask yourself ‘is your financial product war proof?’: In Yemen, we’ve found our wartime financial needs are definitely different from what we wanted before the war. For example, microfinance institutions did a great job during peace time but they haven’t been able to survive this conflict. What people want now is somewhere to exchange their money. Mansour Rageh, acting manager for islamic and specialist banks,Central Bank of Yemen, Sanaa, Yemen

Look for opportunities: In Zimbabwe and Somaliland, alternative financial service providers have made enormous progress perhaps in part because of the absence of a strong traditional banking sector and government capacity. EcoNet in Zimbabwe started with a digital payment service EcoCash and now have a range of overlay services including savings, pay-go solar, and others. In Somaliland, Telesom offers a digital payment service called Zaad, which has also acted as the gateway to a more diverse set of financial products. Kay McGowan

Go digital: As it is not easy to move large amounts of cash around in Palestine due to Israeli restrictions at check points, we’re trying to encourage merchants to move from cash to point of sale machines. We have already developed a modern electronic payment system to ensure safe, real time, electronic payments, including the infrastructure for mobile banking – but the challenge is to get business owners on board with digital payments. Jihad Al Wazir, governor, Palestine Monetary Authority, Ramalla, Palestine @JihadWazir

Source: The Guardian (link opens in a new window)

digital payments, financial inclusion