AFI welcomed Central Bank of The Gambia (CBG) into its network in December 2017. We had the pleasure of meeting the First Deputy Governor Dr. Seeku Jaabi, who oversees financial sector stability in the country, during the two-day training on challenges and risks that come with large-scale changes in digital financial services (DFS). The training was held as part of the AFI Public-Private Dialogue (PPD) platform, in Conakry, Guinea from 8–9 May 2018.

Throughout our conversation, Dr. Seeku Jaabi talked about CBG joining AFI, the importance of digital financial services (DFS), how his institution is reducing the gender gap, and why innovation is CBG’s priority. Here are the highlights.

AFI: Central Bank of The Gambia joined the AFI network recently, at the end of 2017. Can you tell us the reasons behind your decision to join our organization?

First Deputy Governor, Dr. Seeku Jaabi: This was in the works for a few months last year. When we had to finally decide, and since I am responsible for financial sector including financial inclusion, I visited Malaysia for a meeting of the Islamic Financial Services Board. (IFSB) When I saw AFI on the second floor at its head office in Sasana Kijang, Kuala Lumpur, and the meeting I was attending was on the third floor, I said, “this is the organization I am looking for.” I went straight to the AFI office and met with the Deputy Executive Director (Norbert Mumba) to discuss our potential membership with him.

Back in The Gambia, I discussed the membership issue with the Governor and the officials of Microfinance Department, who are all promoters of financial inclusion. We immediately worked on the process to become a member of AFI being well-aware of the potential of financial inclusion in my country. CBG has been working on financial inclusion for many years with guidelines and laws on agency banking, electronic money transfers, telecoms, banks, microfinance institutions, and even internet service providers all providing different financial applications to serve the population across the country.

We saw the need to be part of such a global body like AFI, to reach out and get the benefit to our people. That’s the key reason why we wanted to be a member of AFI.

AFI: We’re glad to have you as part of the AFI network. Is this your first training with us?

First Deputy Governor, Dr. Seeku Jaabi: This is not my first time at an AFI program. I attended the G-24/AFI Roundtable meeting during 2018 IMF Spring Meetings in Washington D.C in April, 2018. The Director of the Microfinance Department, Mr. Bai Senghor also attended the Peer Advisory Service (PAS), co-hosted by Central Bank of Nigeria (CBN) in Abuja, where they reviewed the Nigerian National Financial Inclusion Strategy (NFIS). As a result, we started working on developing our NFIS that will pave the way forward.

AFI: That’s good to hear. What are your impressions of the training?

First Deputy Governor, Dr. Seeku Jaabi: Back here in Guinea, Conakry, I very much like the training — every part of it was interesting and enjoyable; I got to meet the representatives from GSMA and Mastercard, whom I had met last year at the GSMA program in Dar El Salam, Tanzania — happy to meet them here again! All their presentations and meetings were valuable and relevant for us as a country going into financial inclusion.

With all my personal exposure to financial inclusion as a researcher (postgraduate and Doctoral levels), and having published over five journal articles on financial inclusion, I found these trainings interesting and value added. What I learned here will surely be shared with key stakeholders in The Gambia.

AFI: What takeaways are you bringing home with you and how will you apply your knowledge?

First Deputy Governor, Dr. Seeku Jaabi: Mastercard is opening a branch in Senegal, very close to The Gambia, so when we engage our banks and financial institutions, we are thinking of inviting them as presenters, which can be of interest to everyone. Adoption of their programs and that of GSMA, together with digital finance applications rolled out by many banks in The Gambia would benefit the majority of our people.

National economic growth and development cannot go ahead with the financial sector lagging behind, as there is a consensus among researchers of a positive correlation between growth and financial sector development nexus. For financial sector to be inclusive, mobile money and agency banking must be key drivers. For the financial sector to benefit the people, financial inclusion is key.

Economies can grow by five, six or seven percent, but this does not mean that it is broadly inclusive — reaching out to the ordinary people. With very high mobile money penetration in Africa, this can be exploited to reach out to all, for everybody to enjoy the growth.

AFI: Well said about an inclusive financial sector and its dependence on financial inclusion. Has CBG taken steps to enhance the uptake of DFS and advance financial inclusion?

First Deputy Governor, Dr. Seeku Jaabi: We have taken giant steps in this area. We have guidelines on e-money, mobile money and agency banking. Over the years, we have visited Kenya and other frontier countries in digital finance to understudy MTO operations, mobile money services and agency banking, among other FinTech services. To save time and avoid re-inventing the wheel, these visits helped to draw guidelines that are today supportive and relevant to the local industry.   

AFI: Mobile money must play a key role.

First Deputy Governor, Dr. Seeku Jaabi: Yes, most of the financial institutions in my country including commercial banks and microfinance institutions have gone into mobile money. Many of them are also into mobile applications. Mobile phones are used to pay utilities, pay transport, even taxi fares; it is all very convenient. We are now trying, as a member in AFI, to see how our people can benefit more from these additional methods of digital financial inclusion. As a policy guide, CBG is working with AFI and with other leading countries like Nigeria to draw out The Gambia’s financial inclusion strategy.

AFI: Many of our members pledge to halve the gender gap in their jurisdictions by 2021. What measures are CBG taking to cut the gender gap?

First Deputy Governor, Dr. Seeku Jaabi: Indeed, gender is key in any national development. No country can develop with half of the population — women — left behind. From the pioneers of formal microfinance such as Grameen Bank, BancoSol in Bolivia, and Bank Rakyat Indonesia, one always thinks of women when we talk of microcredit and microfinance.

Over the years, women have become key reliable customers in microfinance. According to Hulme and Mosley (1996 and 1998), women pay loans regularly, the payment rate is near 100 percent — and they pay even before the deadlines. This could be possible because women do not have many alternatives to accessing finance.

To quote Professor Muhammed Yunus, “unlike men, women are credit-worthy customers in microfinance, and make the best use of finances to spend on their families.” They do not require handouts or highly subsidized funds as these often turn out to be unsustainable. However, they need to be given equal opportunities and incorporated into the mainstream financial sector just like men, to grow out of poverty and its associated consequences.

We have adopted laws that remove any kind of restrictions and today, we have microfinance institutions that work across the country, and are actively financing women groups and enterprises owned by women with 100% repayments.

AFI: That’s very encouraging to hear. Do you have any barriers in advancing women’s financial inclusion?

First Deputy Governor, Dr. Seeku Jaabi: As you are aware, there are always costs when putting in place structures in rural areas to increase outreach. These costs include utilities and staff-related expenses to justify the absence of major banks in rural areas. Also, asset collateral, strict business plans and audited financial statements are difficult requirements for women enterprises to meet.

However, through the use of mobile money, banks are able to conveniently reach the most remote parts of the country.

We’ve observed that men have more bank accounts than women. Reaching out with mobile technology and microfinance are policy directions we are also taking to address the gender gap. There are also training institutions and MFIs that provide basic business training before credit disbursements to help ensure effective and efficient use of funds not only to ensure repayments are assured but also boost business growth.

AFI: The theme of the 2018 AFI Global Policy Forum is Innovation, Inclusion, Impact. What do these words mean to you as senior policymaker and as part of the AFI network?

First Deputy Governor, Dr. Seeku Jaabi: There are structural bottlenecks in many developing Sub-Saharan African countries operations like ours. This is where innovation comes in, to address these constraints. Our membership in AFI will allows us to network with a wide range of policymakers at the global stage where we can tap into some of their knowledge-based resources. In the region, we collaborate with Central Bank of Nigeria (CBN) on many fronts including financial inclusion.   

Our membership in AFI not only links us to CBN, but also to the global community — across Asia, South America, Eastern and Southern Africa — regions where technology and innovations are key drivers in financial sector development. As such, we hope to increase our outreach and obtain knowledge-based finance to reach out to the majority of women, and youth to address the gender gap; this is our objective, with technology and innovations as key drivers of our financial inclusion journey, a lot can be achieved.

AFI: It’s been great talking to you, Dr. Jaabi. Thank you for spending the time in sharing your valuable insights with us.

The AFI-PPD training was organized ahead of the 6th Annual Leaders’ Roundtable of African Financial Inclusion Policy Initiative (AfPI) held from 10–11 May, 2018.