SEACENBIS High Level Seminar Papua New Guinea October

SEACEN-BIS High Level Seminar Papua New Guinea October 2015 Norbert Mumba Deputy Executive Director Bringing smart policies to life

Contents • • • About AFI Global FI Trends What is impact FI growth Impact of FI Discussion Bringing smart policies to life

About AFI • • Global Alliance 125 Members 95 Countries 6 Working Groups Bringing smart policies to life

AFI Governance Membership Council (All Principal Members) Decision Making Strategic Guidance Board Committees Advisory • • • Execution / Implementation Budget & Finance Policy & Program Review Global Engagement and/or Global Standards (TBD) Advisory Councils To potentially include in the future: • Donor Council • Stakeholder Council AFI Management Unit Bringing smart policies to life

AFI Services Effective financial inclusion policy reforms National & Global Policy Coordination Global Advocacy G 20 GPFI SSBs Peer Learning on Global Standards Global Policy Forum High-level Commitment National Progress Maya Declaration Improved Knowledge & Institutional Capacity Building Grants Working Groups Knowledge Exchanges Peer Advisory Trainings & Workshops Joint Learning Programs Knowledge Products Community & Partnership Building Regional Initiatives Public Private Dialogue Global Policy Forum Online Member Zone Bringing smart policies to life

AFI Working Groups Consumer Empowerment & Market Conduct Financial Inclusion Data Digital Financial Services Financial Inclusion Strategy Global Standards Proportionality SME Finance Bringing smart policies to life

AFI’s Strategic Vision: A Dynamic Growth Path Level of Member Engagement 2016 2012 Learning & Exchange Platform Policy Driving Network Policy Leadership Alliance Grant. Making Facility 2008 Time Bringing smart policies to life

AFI’s Strategic Vision: A Dynamic Growth Path Level of Member Engagement 2016 2012 Learning & Exchange Platform Policy Driving Network Policy Leadership Alliance Grant. Making Facility 2008 Grants Time Bringing smart policies to life

AFI’s Strategic Vision: A Dynamic Growth Path Level of Member Engagement 2016 2012 Learning & Exchange Platform Grant. Making Facility 2008 Policy Driving Network Policy Leadership Alliance Global Policy Forum Working Groups Time Bringing smart policies to life

AFI’s Strategic Vision: A Dynamic Growth Path Level of Member Engagement 2016 2012 Learning & Exchange Platform Grant. Making Facility 2008 Policy Driving Network Policy Leadership Alliance Global agenda (SSBs, GPFI) Maya Declaration Public-private Dialogue Regional Initiatives Time Bringing smart policies to life

AFI’s Strategic Vision: A Dynamic Growth Path Level of Member Engagement 2016 2012 Learning & Exchange Platform Policy Driving Network Policy Leadership Alliance Capacity Building Technical Assistance Stakeholder Alignment Grant. Making Facility 2008 Time Bringing smart policies to life

Global Trends in FI • Regional FI growth • SEACEN Countries growth • What policies impacting growth Bringing smart policies to life

Mena Region 50 2011 2014 39 40 30 25 25 20 10 27 23 14 4 6 10 0 Yemen, Egypt, Jordan Rep. Arab Rep. Tunisia Morocco Syrian Arab Republic Extract Findex 2014 Bringing smart policies to life

Eastern Europe and Central Asia 2011 74 72 72 59 48 18 ed o. . Be. la ru s ac M ss ia n . . . ey rk . . Tu Ru Ky rg yz R. ia 4 m an 58 57 17 18 11 Ar ist jik Ta an gh Af 3 67 2014 en 9 10 is. . . 80 70 60 50 40 30 20 10 0 Extract Findex 2014 Bringing smart policies to life

80 20 Niger Guinea Burundi Madagascar Burkina Faso Sudan Senegal Sierra Leone Congo, Dem. Rep. Malawi Togo Ethiopia Zimbabwe Cote d'Ivoire Zambia Tanzania Ghana Rwanda Nigeria Uganda Namibia South Africa Kenya Lesotho Liberia Swaziland Sub Sahara Africa 2011 7 7 7 9 2014 18 18 14 15 15 16 17 70 60 40 32 34 36 75 59 44 44 40 41 42 22 0 Bringing smart policies to life

ya M di a nm Vi ar e Ph tn ili am pp in e Ne s In pa do l ne sia In Th dia ai la nd Ch M ina al ay S Ta ri sia iw La an nk , C a h Ho M ina on ng K Ko ore gol ng a, ia SA Re R, p. C Si hin ng a ap La ore o PD R Fi ji PN Br G un ei bo m Ca SEACEN FI Growth 120 2011 80 40 36 31 31 34 22 23 2014 96 96 91 92 94 83 78 79 81 53 No Data 0 Bringing smart policies to life

SEACEN FI Growth extract from Findex Country 1 Cambodia 2011 3. 7 2014 % Change 22. 2 18. 5 Hong Kong SAR, 2 China 3 India 4 Indonesia 88. 7 35. 2 19. 6 96. 1 53. 1 36. 1 7. 5 17. 9 16. 5 80. 7 91. 8 33. 8 31. 3 96. 4 No 2014 data 14. 5 14. 1 8. 5 4. 7 -1. 9 5 6 7 8 9 10 Lao PDR Malaysia Mongolia Nepal Philippines Singapore 26. 8 66. 2 77. 7 25. 3 26. 6 98. 2 Pop in M 10. 4 887. 9 177. 7 22 2. 1 18. 2 64. 8 People Change 1. 9 0. 5 159. 0 29. 3 3. 2 0. 3 1. 5 3. 1 -0. 1 Bringing smart policies to life

Table cont’d 11 Sri Lanka 68. 5 82. 7 14. 2 12 Chinese Taipei 87. 3 91. 4 4. 1 13 Thailand 72. 7 78. 1 5. 5 54. 8 3. 0 14 Vietnam 21. 4 31. 0 9. 6 69. 3 6. 6 15 Fiji 0. 8 No data 17 Brunei 63. 8 19 Myanmar 20 Korea, Rep. 2. 2 No data 16 Papua New Guinea 18 China 15. 3 93. 0 78. 9 15. 1 1112. 6 168. 1 22. 8 40 9. 1 94. 4 1. 3 42. 7 0. 6 Bringing smart policies to life

Basics facts Of the 20 SEACEN countries, 12 are members of AFI Of the 20, data is available for 17 countries q Average rates of inclusion (percentage of age 15 + with an account) = 64% q Includes countries with very high inclusion: Singapore (96%), Korea (94%), Hong Kong (96%), Mongolia (92%) q Excluding those high inclusion countries, average inclusion for SEACEN region is 50%, compared with the global average of 62% Bringing smart policies to life

Basic facts contd q Countries with lowest inclusion in SEACEN are Myanmar (22%) and Cambodia at 23% q Between 2011 and 2014, average growth of inclusion has been 10% (slightly higher at 13% if one excludes the high inclusion members of SEACEN) q Highest growth rates between 2011 and 2014 have been in Cambodia (19%), India (18%) and Indonesia (17%) q In actual numbers of people, a total of 389 million people of the 700 m are from SEACEN Bringing smart policies to life

Basic facts continued 55% of those added to the newly included between 2011 and 2014 are from SEACEN: § § § India = 160 million Indonesia = 30 million Cambodia = 3. 4 million Vietnam = 6. 6 million China = 168 million Bringing smart policies to life

Key Messages • Link between AFI services and increasing financial inclusion • Link between policy interventions and increasing financial inclusion Bringing smart policies to life

Link between AFI services and increasing financial inclusion AFI member countries that joined since 2011 increased financial inclusion by 8. 5 ppts, while non-AFI member countries increased financial inclusion by 9. 9 ppts AFI member countries increased financial inclusion by 8. 6 ppts , while non-AFI member countries increased financial inclusion by 9. 9 ppts Increase in percentage of adults with formal accounts from 2011 -2014 (ppt) 10 [VALU E] 9. 9 10 9. 9 8. 6 5 5 0 0 Median AFI members since 2011 Non-AFI members 23 Bringing smart policies to life

Link between AFI services and increasing financial inclusion AFI members that have adopted Maya Declaration increased financial inclusion by 9. 5 ppts, while AFI members without Maya Declaration increased financial inclusion by 8. 4 ppts Increase in percentage of adults with formal accounts (ppt) Increase in percentage of adults with formal accounts from 2011 -2014 (ppt) 10 9. 5 The increase in financial inclusion is positively correlated (0. 35) with members’ level of engagement with AFI 3. 5 8. 9 Member engagement index 5 2. 5 1. 5 R 2 = 0. 1538 0. 5 0 Median Adopted Maya declaration -20 -10 0 10 20 30 40 No Maya Declaration Bringing smart policies to life

Measurable targets and financial inclusion AFI members with measurable targets increased financial inclusion by 13. 4 ppts, compared to 8. 5 ppts for those without measurable targets Increase in % of adults with accounts from 2011 -2014 (ppt) 16 N members targets = 13 N members no targets = 16 13. 4 12 8. 5 8 4 0 Median Measurable targets No targets Source: Data from World Bank Global Findex, compiled by AFI; AFI Maya Declaration Report 2014 Bringing smart policies to life

National strategies and financial inclusion AFI members with national strategies increased financial inclusion by 10. 9 ppts, compared to 10. 1 ppts for those without national strategies Increase in % of adults with accounts from 2011 -2014 (ppt) N members with strat. = 8 N members without strat = 20 *Angola N/A 16 10. 9 12 10. 1 8 4 0 Median National strat. No national strat. Source: Data from World Bank Global Findex, compiled by AFI; AFI Maya Declaration Report 2014 Bringing smart policies to life

Policy interventions and financial inclusion AFI members with e-money increased financial inclusion by 12. 8 ppts, compared to 8. 1 ppts for those without emoney Increase in % of adults with accounts 2011 -2014 16 Increase in % of adults with formal accounts 2011 -2014 12. 8 12 12 8. 1 8 AFI members with agent banking increased financial inclusion by 10. 6 ppts, compared to 8. 1 ppts for those without agent banking 4 0 0 Median No E-money AFI members with tiered KYC increased financial inclusion by 8. 5, compared to 14. 0 for those without tiered KYC Agent banking Median No Agent banking AFI members with financial literacy increased financial inclusion by 10. 6 ppts, compared to 4. 4 ppts for those without financial literacy Increase in percentage of adults with formal accounts from 2011 -2014 Increase in % of adults with formal accounts 2011 -2014 16 12 8 4 0 8. 1 8 4 E-money 10. 6 14. 0 8. 5 12 10. 6 8 4. 4 4 Median Tiered KYC No Tiered KYC 0 Financial literacy Median No financial literacy Bringing smart policies to life

The AFI Core Set & Financial Inclusion AFI members that collect the AFI Core Set in the past 12 months tend to have slightly higher level of FI in 2014 and also higher growth in FI level (in ppts) between 2011 and 2014, compared with the members that do not. Increase in % of adults with accounts from 20112014 (ppt) 16 % of adults with accounts in 2014 57 14. 0 12 9. 0 8 48. 0 47 47. 0 4 0 37 Average Core Set Average No Core Set Source: Data from World Bank Global Findex, compiled by AFI; AFI Policy Profile N members with Core Set= 9 N members no Core Set= 25 Bringing smart policies to life

Demand-side Survey & Financial Inclusion On average, AFI members with national demand-side survey have slightly higher level of FI in 2014 as well as higher growth in FI level (in ppts) between 2011 and 2014. Increase in % of adults with accounts from 20112014 (ppt) 16 12 % of adults with accounts in 2014 50 12. 0 49. 0 47. 0 9. 0 45 8 4 0 Average 40 Demand-side survey No Demand-side survey Source: Data from World Bank Global Findex, compiled by AFI; AFI Policy Profile Average N members with demand-side survey= 14 N members no demand-side survey = 20 Bringing smart policies to life

Agent Banking & Financial Inclusion On average, AFI members with agent banking have substantially higher level of FI in 2014 as well as higher growth in FI level (in ppts) between 2011 and 2014. Increase in % of adults with accounts from 20112014 (ppt) 12 % of adults with accounts in 2014 60 10. 6 7. 7 8 4 40 20 0 Average Agent banking 51. 0 20. 0 0 No agent banking Source: Data from World Bank Global Findex, compiled by AFI; AFI Policy Profile Average N members with agent banking= 31 N members no targets = 3 Bringing smart policies to life

Remote Account Opening & Financial Inclusion On average, AFI members that allow remote account opening at a bank/non-bank on mobile device or through agents have substantially higher level of FI in 2014 as well as higher growth in FI level (in ppts) between 2011 and 2014. 16 12 Increase in % of adults with accounts from 20112014 (ppt) % of adults with accounts in 2014 64 12. 0 52. 0 9. 0 8 44 44. 0 4 0 Average 24 Allow Remote account opening Do not allow Source: Data from World Bank Global Findex, compiled by AFI; AFI Policy Profile Average N members allowing remote account opening = 15 N members not allowing = 20 Bringing smart policies to life

Consumer education & financial inclusion On average, AFI members involved in consumer education and protection saw higher growth in financial inclusion level between 2011 – 2014 (ppts) as well as higher level of financial inclusion Increase in % of adults with accounts from 2011 -2014 (ppt) 12 % of adults with accounts in 2014 N members involved = 34 N members not involved = 1 10. 5 N members involved = 33 N members not involved = 1 8 60 50 48. 6 40 4. 4 30 14. 1 20 4 10 0 0 Average Involved in consumer protection Not involved Source: Data from World Bank Global Findex and AFI Policy Profiles, compiled by AFI Bringing smart policies to life

Publication of reports on complaints and enforcement & financial inclusion On average, AFI members that published regular reports with statistics on complaints and enforcement actions saw higher growth in financial inclusion level between 2011 – 2014 (ppts) Increase in % of adults with accounts from 2011 -2014 (ppt) % of adults with accounts in 2014 N members with publication = 22 N members without publication= 13 N members with publication = 22 N members without publication= 12 12 52 11. 4 8. 5 8 48 47. 5 47. 7 4 44 0 Average With regular publication Without regular publication Source: Data from World Bank Global Findex and AFI Policy Profiles, compiled by AFI Bringing smart policies to life

Personal national identification system & financial inclusion On average, AFI members with personal national identification system saw higher growth in financial inclusion level between 2011 – 2014 (ppts) as well as higher level of financial inclusion Increase in % of adults with accounts from 2011 -2014 (ppt) % of adults with accounts in 2014 N members with ID = 29 N members without ID = 3 12 51 10. 0 6. 9 8 48. 9 47 4 43 0 39 Average N members involved = 29 N members not involved = 4 42. 7 Average With personal national ID system Without personal national ID system Source: Data from World Bank Global Findex and AFI Policy Profiles, compiled by AFI Bringing smart policies to life

Comprehensive diagnostic study & financial inclusion On average, AFI members that have undertaken comprehensive diagnostic study to inform development of financial inclusion strategy saw higher growth in financial inclusion level between 2011 – 2014 (ppts) as well as higher level of financial inclusion Increase in % of adults with accounts from 20112014 (ppt) 16 12 12. 0 N members with diagnostic study = 12 N members without diagnostic study = 21 9. 0 8 % of adults with accounts in 2014 N members with diagnostic study = 12 N members without diagnostic study = 22 60 50 54. 1 44. 3 40 4 30 0 Average Undertaken diagnostic study Without diagnostic study Source: Data from World Bank Global Findex and AFI Policy Profiles, compiled by AFI 20 Average Undertaken diagnostic study Without diagnostic study Bringing smart policies to life

National financial inclusion taskforce & financial inclusion On average, AFI members that have a general national financial inclusion taskforce/council that coordinates financial inclusion strategy saw higher growth in financial inclusion level between 2011 – 2014 (ppts) as well as higher level of financial inclusion Increase in % of adults with accounts from 2011 -2014 (ppt) N members with taskforce = 15 N members without taskforce = 19 % of adults with accounts in 2014 N members with taskforce = 15 N members without taskforce = 20 54 14 50. 8 11. 4 50 9. 6 10 46 6 Average With national financial inclusion taskforce Without national financial inclusion taskforce 2 Source: Data from World Bank Global Findex and AFI Policy Profiles, compiled by AFI 45. 2 42 Average With national financial inclusion taskforce Without national financial inclusion taskforce 2 Bringing smart policies to life