6th AfPI Leaders Roundtable
Conakry, Guinea
10 May, 2018 

Opening Remarks by Dr. Alfred Hannig, AFI Executive Director

– Your Excellency, Prime Minister of the Republic of Guinea Mamady Youla

– Governor Dr. Lounceny NABE, Banque Centrale de la République de Guinée

– Governor Dr. Rogerio Lucas Zandamela, Banco de Mocambique, AfPI Chairperson

– Governors, Deputy Governors, AfPI leaders present

– Mr. Stefan Nalletamby, Representing the President of the African Developement Bank (Director, Financial Sector Development)

– Distinguished delegates

It is my great pleasure and honor to welcome you, on behalf of Alliance for Financial Inclusion (AFI), to this important AFI Regional Initiative Leaders Roundtable, the 6th meeting of AfPI. First and foremost, let me thank Banque Centrale de la République de Guinée for hosting us and jointly organising this Leaders Roundtable and the preceded events that were held earlier this week: The meeting of AfPI’s Expert Group of Financial Inclusion Policy (EGFIP) and the Regulatory Training on Digital Financial Services under AFI’s Public-Private Dialogue (PPD). We are grateful for the outstanding arrangements, your generous support and the warm hospitality we are all receiving right from the moment when we leave the plane and put our foot on the soil of your country. Thanks for what you are doing for the network.

2018 is AFI’s landmark year, as we turn 10 years. Our decade long journey has been instrumental to drive the network to a policy leadership alliance. Together, we have been able to bring AFI to a level of maturity, where we are witnessing significant progress in addressing financial inclusion challenges across the network. Through AFI’s interventions that leverage on peer-learning from network’s expertise infused with technical cooperation and partnerships; AFI members have thus far implemented 380 financial inclusion policy improvements, out of which 118 were made in 2017 alone. These reforms were in various areas, including SME Finance, Consumer Empowerment and Market Conduct and National Financial Inclusion Strategies, but the largest proportion were in Digital Financial Services (DFS) (32%). I am glad to note that, members from Africa had the largest share of policy changes in 2017 at 47% or 56 policy changes.

So, we can say with confidence that we have come a long way in the last 10 years. However, we are still facing challenges. A glimpse at the most recent Global Findex data which were presented by the World Bank at the Spring meeting just a month ago shows a picture which should encourage the Alliance to work even harder. Please let me just summarize a few data points from this recent exercise:

• Globally, the share of adults owning account is now 69%, an increase of 7% since 2014. (515 million adults who have gained access to financial tools)
• Main driver: Digital payments, government policies and a new generation of financial services accessed through mobile phones and the internet.
• Sub-Saharan Africa demonstrated most persuasively that finTech can contribute to financial inclusion. 21% of adults in SSA have mobile money account (nearly twice the share in 2014), highest of any region in the world.
• Digital technology is also transforming the payment landscape. Globally, 52% of adults have sent or received digital payment in 2017 (2014:42%).
• Mobile phones and internet also offer strong openings for progress. Globally, one billion financially excluded adults already OWN a mobile phone and about 480 million have internet access.
• There are now more than 4 billion internet users around the world. A quarter of a billion users came online for the first time in 2017. Africa has seen the fastest growth rates.
• There are 5.135 billion mobile phone users across the globe with a total of 8.48 billion mobile phone connection.
• Finally, and this is not so good news, despite the overall growth of financial inclusion in terms of account ownership the financial inclusion gender gap remains stable at 9%.

Now, the numbers indicate that digitally enabled financial services continue to play a key role in driving financial inclusion. But not all global trends point into a positive direction with regards to digital financial inclusion these days.

First, developed economies still show resistance to go cashless. This is not an issue for these countries in terms of inclusion as their access ratios are traditionally very high, but their voice in the global discourse also through the SSBs count. And we are all aware that cashless is key for financial inclusion in the developing world. This trend might therefore hamper efforts of all our members and partners to move forward with digital financial inclusion and even stifle innovations, at least temporarily.

Second, the abuse of big data and the increasing pressure on global Tech companies can also produce indirect effects for our work. Efforts by emerging economies to innovate in the area of digital financial inclusion could be affected or at least halted.

Third, the dynamic global growth of e-commerce driven by the rapid emergence of FinTech solutions has raised the attention for serious risks on the demand side with household debt potentially growing fast. At the same time, international activities to resolve demand side issues are still stuck in awareness raising, and we have not seen the cutting-edge solutions to facilitate behavioral changes. From a financial regulator’s view point, there is therefore, a huge need for transformative FinTech for the demand side.

We could easily conclude that all these challenges just mentioned could potentially produce a back lash to financial inclusion. However, I would wish that no one in this room will be surprised when I am now saying that these challenges should be an opportunity rather than a risk for AFI, and in particular an opportunity for the Regional Initiative AfPI.

Africa is the cradle of digital financial inclusion which has been recognized widely. And again, the Findex results attest to these fact that Africa leads in the Mobile Money accounts, currently at 20.9% of adult population compared to 4.2% in South Asia, 5.3% in Latin America & Caribbean and 4.4% globally. The data also shows that 34.4% of adult population in Sub-Saharan Africa made of received digital payment in 2017, up from 26.9% in 2014.

Based on what we have learned and the maturing knowledge base in the AFI network, at the global and the regional level, we are now in the position to enhance our policy content and guidance work through issuing member-based practical policy tools that guide in-country implementation. Several initiatives are underway: For instance, the key deliverables of this 6th AfPI Leaders Roundtable are Policy frameworks for digitally enabled cross border remittances and interoperability of digital financial services in Africa. These tools, which have been developed by the Expert Group of Financial Inclusion Policy (EGFIP) with close support of the AFI Management Unit, will guide members in implementing policies that support cross border remittances and interoperability. The specific features of these frameworks are that they are conceptualized to drive usage and efficiency on the basis of high-level policy principles which come from the practical experience of the African sub-network of AFI.

The AfPI- will submit the draft of these frameworks to you for consideration during this meeting. We are certain that the discussions during the different sessions of this AfPI Leaders Roundtable will enrich these frameworks.

Alongside with the issuing of these two policy frameworks we will also continue to roll out other key workstreams:

These workstreams include Fintech for Financial Inclusion of which we are now seeing traction. Our interventions included member needs survey to provide targeted capacity building and other member services that facilitate in-country policy implementation on Fintech. As a result, we have seen policy improvements from the membership ranging from enactment of Fintech Laws, implementation of various regulatory approaches such as test and learn, sandboxes, and practical crowd-sourcing of problems to be solved by fintech providers in a controlled environment. We will further elevate this in our coming Global Policy Forum in September this year in Sochi, Russia.

The Gender and financial inclusion workstream has provided positive impact, since we commenced it two years ago; with the recently released Findex Data, much as on a global scale the gap still exists between male and female access to formal financial services.

Against the background of these important initiatives I hope you can agree that we are in good shape to take up the global challenges we are currently facing. I believe that once again Africa can lead the way in enhancing the next generation of digital financial inclusion. This meeting is an important step in this direction, and it is obvious that AfPI has a key role to play.

In underscoring the importance of AfPI we have secured cooperative arrangements with AfDB through an MoU to facilitate support of the AfPI programs. We would work together with AfDB in enhancing financial inclusion in the Continent. We are also looking forward to expanding our cooperation with likeminded development partners and the private sector to support AfPI. For, these reasons, tomorrow will have our first ever regional PPD and AfPI will be our debut.

Once again, let me thank our host, the Central Bank of Guinee, for making this event happen and allowing us to be here. Thank you all for being part of this journey.

Thank you for your attention.