National financial inclusion strategies (NFIS) play a pivotal role in helping disadvantaged groups respond to and survive crises, network leaders said on 6 July, noting how the fallout from COVID-19 was disproportionately impacting the most vulnerable.

Central Bank of Sri Lanka Governor Professor W. D. Lakshman, in opening the AFI network’s first-ever virtual member training on NFIS, noted how the pandemic had “taught us the critical need to be prepared with an appropriate financial toolkit to face and manage crises”.

While urging his fellow regulators to pursue the development of NFIS, he emphasized that such strategies would not “guarantee success” on their own, explaining that they must be matched with “continuous monitoring of developments at the grassroots level”. This, he added, would ensure the implementation of cross-cutting actions and reforms through multi-stakeholder coordination.

In support of the ongoing training, he said that the peer learning event would “enable participants to establish a dynamic network to interact and to exchange knowledge and experience”, adding that “without doubt this training would assist participants in achieving the targeted objectives of NFIS”.

The central bank is well positioned to co-host the training. In April 2019, it launched a roadmap for sustainable finance and is currently poised to launch its first NFIS. Moreover, the governor noted that sustained efforts to promote financial inclusion had resulted in roughly 88 percent of adults having accounts at financial institutions – including 89 percent of men and 87 percent of women –, higher than many of its neighbours. There is also limited difference between take up rates in rural and urban areas.

According to Governor Lakshman, Sri Lanka’s upcoming NFIS will create “fair and equitable access” to a range of appropriate, secure and affordable financial products and services that will build resilience among vulnerable groups. Its focus will be on four pillars: digital finance and payments, micro, small and medium-sized enterprise finance, consumer protection, and financial literacy and capacity building.

AFI Executive Director Dr. Alfred Hannig congratulated Governor Lakshman on this significant milestone, saying that the “Central Bank of Sri Lanka has been at the forefront of developing the NFIS in Sri Lanka and its indeed great to hear that the framework will be launched in 2020”.

“It will certainly help to further advance the financial inclusion agenda in Sri Lanka and provide more accessible, effective, efficient, and affordable financial services, which are responsive to the needs of the population,” he added.

Dr. Hannig noted that the development of NFIS is a core focus areas and priority for many nations in South Asia, including Nepal, Bangladesh, Maldives and Afghanistan. While AFI members in Bhutan and Pakistan have already launched their strategies, he said that others across the region were working towards finalizing and implementing their NFIS.

Worldwide, he said that of the 88 countries where AFI member institutions were represented, 41 countries already had a documented NFIS with an additional 15 in the development stage of their strategy.

As such, Dr. Hannig said that the “member training is very timely, and we hope will build and enhance the capacity of staff to develop and implement NFIS in their respective countries”.

The virtual capacity building event, co-organized by Central Bank of Sri Lanka and AFI, is being run twice in the same week to cater to members in different time zones. Originally slated to be held in person, the training was switched to virtual platforms due to COVID-19. Training on NFIS and data are among the most popular and longest-running capacity building offerings.

Nearly 50 participants took part in the first of three days of training on implementing and monitoring NFIS. Subsequently sessions explored AFI’s NFIS Policy Model, which is currently open for public comments and expected to be endorsed by the network during its Annual General Meeting in September. Participants discussed themes around multi-stakeholder cooperation focusing on the crucial roles of central bank in driving financial inclusion and the secretariat in managing stakeholders and obtaining agreement on various NFIS processes. Training also looked at budgets and funding, as well as effective methods of communicating NFIS to the wider public. Day three looked at the measurement and review of NFIS, and AFI’s soon-to-be-published NFIS Monitoring and Evaluation Toolkit.

Enhancing the training were participants from other AFI member institutions, who shared their country experiences in NFIS, including Bangko Sentral ng Pilipinas, Central Bank of Egypt, Central Bank of Eswatini, Central Bank of Solomon Islands and Reserve Bank of Fiji. They provided varying perspectives, with some having already implemented multiple NFIS’ while other were still developing their inaugural strategy. All, however, provided vital insight into the development and implementation of NFIS, as well as key takeaways and challenges faced.

Training was led by technical experts from Central Bank of Sri Lanka and the AFI Management Unit, and was attended by senior officials from AFI member institutions who are leading their institution’s NFIS development.