1) The document discusses policies that can accelerate financial inclusion in Africa, such as agent banking policies, mobile banking policies, and policies around financial products, no-frills accounts, financial identification, and technology banking. 2) It recommends that cooperatives craft policies to facilitate strategic partnerships through agent banking, enable mobile money offerings, lower barriers for inclusive financial products, provide basic no-fee accounts, address identity issues, and promote accessible technology-based banking. 3) The document also discusses the importance of deposit guarantee, financial literacy, compulsory coverage of intermediaries, and funds policies to further accelerate financial inclusion across the continent.

1. AFRICA CONFEDERATION OF
COOPERATIVE SAVINGS AND CREDIT
ASSOCIATIONS (ACCOSCA)
6th SACCO LEADERS FORUM,25th to 27th March 2015
“Effective policies that promote the cooperative role in
financial inclusion: do we have the data?”
PRESENTED BY
GOLDEN KADZIYANIKE
NACSCUZ TECHNICAL ADVISOR

2. “To raise new questions, new possibilities, to
regard old questions from a new angle, requires
creative imagination and marks real advance in
science”, (Einstein and Infeld, 1938)

3. Introduction
• Financial inclusion (FI) – access to quality
financial services – has increasingly become a
focus of government, private sector, financial
cooperatives, economist and civil society actors
who recognize its tremendous potential as a
tool for achieving economic growth and
improving standards of living in underserved
communities.
• The expansion of FI is highly desirable, but it
must be pursued responsibly, with an
awareness of the potential negative
consequences that can accompany inclusion.

4. • Actors in the financial inclusion network ,
particularly cooperatives are called upon to craft
or cause to be crafted effective and robust
policies that addresses both the supply side and
demand side of the financial intermediation
equation.
• Such policies must be anchored on accurate and
current financial data.
• But the big question is , “ Do we as cooperatives
have the data ?, And if No what do we do?”

5. From Financial Exclusion To
Financial Inclusion
• Financial exclusion can be viewed as a process whereby
people encounter difficulties accessing and or using
financial services or products in the mainstream
market that are appropriate to their needs and enable
them to lead a normal social life in the society in which
they belong.
• It is a position faced by those who are in the “bottom
of the pyramid” segment who are unable to obtain
mainstream financial products such as bank accounts,
savings, investments, insurance or affordable credit
and other related e-commerce products and services
such as online shopping, virtual money, debit cards etc.

6. • Empirical evidence gleaned from the financial
services landscape show that there is a direct
correlation between low income and financial
exclusion and that the majority of those who
are financially excluded are resident in the
Bottom of the Pyramid (BOP) strata of the
populace.

7. • Complex and multi-dimensional factors
contribute to financial exclusion and
accordingly require comprehensive and
robust policies that guide providers, products
and technologies that work within and are a
reflection of the socio-economic, political,
legal and geographic conditions in their
countries.
• It is imperative that cooperatives craft or
cause to be crafted robust policies that result
in financial inclusion.

8. What is financial inclusion
• Financial inclusion denotes a state in which all
people (inclusive of the bottom of the pyramid
[BOP] populace) have access to timely,
appropriate and desired financial products and
services in order to manage their money
effectively.
• Such a state is achieved through financial literacy
and financial capability on the part of the
consumer and financial access on the part of
product services and suppliers (Transact, 2007).

9. • According to UNDESA and UNCDF (2006) ,
the definition of financial inclusion
encompasses the concept’s two primary
dimensions viz,
• 1) that financial inclusion refers to a
customer having access to a range of
formal financial services from simple credit
and savings services to the more complex
such as investments, insurance and
pensions

10. • 2) that financial inclusion implies that
customers have access to more than one
financial services provider, which ensures that
customers have a variety of competitive
options.

11. Why Financial Inclusion
• Extending formal banking system among
underprivileged in rural and urban areas of Africa.
• Equipping poor people of Africa with the confidence
to make informed financial decisions.
• It protects the poor people from the clutches of
moneylenders.
• It provides an avenue for bringing the small savings of
the poor into the formal financial intermediation
system and channels them into investment.

12. • It promotes financial literacy of the rural population
and guides them to avoid the expensive and
unreliable financial services.
• It helps the weaker sections to channelize their
incomes into buying productive resources and
assets.
• In the situation of economic crisis, the rural
economy can be a support system to stabilize the
financial system. Thus, it helps in ensuring a
sustainable financial system.

13. Policy Interventions that
accelerate financial inclusion
•Given the glaring facts that 2,5 billion
working-age adults globally have no access to
formal financial services and that in Sub-
Saharan Africa, only 24 percent of adults have
a bank account, there is a loud call for financial
cooperatives as democratic institutions to
craft effective policies that will accelerate the
democratization of the financial services
landscape.

14. • Such a call is no mean feat and requires
cooperative players to innovate and not only
think outside the box but to think widely and
wildly.

15. Policies That Accelerate Financial
Inclusion
1. Agent Banking Policies
Innovative policies and regulations can
facilitate strategic partnerships between
financial cooperatives as agents of formal
banking institutions. Through agent banking,
cooperatives will be able to deliver financial
services to unbanked customers at lower
costs, and with greater convenience

16. 2 Mobile Banking Policies
• The advent of techno savvy financial consumers ,
coupled with the explosive growth of mobile phone
usage around the world, particularly among the low
income and rural group, has given birth to a range of
operations, such as deposit taking, withdrawal,
payment transactions, and other conventional
banking services.
• Based on the above, cooperatives are encouraged to
craft mobile banking policies that will enable them to
offer mobile money to their members through
mobile technologies and services.
• This would however require close collaboration
between banking and telecommunications regulators

17. 3. Financial Products Policies
Financial cooperatives can accelerate effective
financial inclusion policies by influencing fiscal and
monetary authorities to institute regulatory reform
that are aimed lowering barriers for start-up
institutions which can develop various financial
products geared toward low-income clients.
Accordingly, Policy instruments should be designed
to promote new entrants without distorting the
market.
4. No-frills accounts Policies
Financial cooperatives are encouraged to provide
basic banking no-frills accounts with nil or very low
minimum balance as well as charges that make
such accounts accessible to vast sections of the
population.

18. 5. Financial Identification Policies
Critical constraints to financial inclusion are
centred on the bank requirements of Know Your
Client/ Customer. Ironically , many poor people
particularly those in rural and marginalised areas
lack personal identity (such as birth record) or
financial identity (such as credit or transaction
history) which constrains their access to formal
financial services.

19. 6. Technology Banking Policies
Recognizing that technology has the potential to
address the issues of outreach and credit delivery in
rural and remote areas in a viable manner, financial
cooperatives are advised to craft policies that facilitate
the effective use of information and communications
technology (ICT), to provide doorstep banking services
through the BC model where the accounts can be
operated by even illiterate customers by using
biometrics, thus ensuring the security of transactions
and enhancing confidence in the banking system.

20. 6 Deposit Guarantee Policies
• Financial cooperatives are called upon to come up
with a robust deposit protection scheme that
provides assurance or a guarantee to depositors
that they will receive their deposits in part or in
full in the event of a bank failure
• Deposit insurance protection promotes financial
inclusion by fostering confidence in financial
institutions and potentially leading to greater
savings among the poor provided they are
informed about safe places to store their money.

21. 7 Financial Literacy and Education Policies
• Most deposit protection systems carry out
financial literacy and public awareness campaigns
to raise awareness among the banked and
unbanked public on the benefits and limitations
of deposit protection, deposits which are
protected, coverage limits, types of providers and
products are covered (or not), and safe methods
of storing their money thereby promoting the use
of the main stream banking.

22. 8 Compulsory Coverage of Financial
Intermediaries
• Financial Cooperatives, through their national
associations and ACCOSCA are called upon to
craft or cause to be crafted policies that makes
membership to DPS compulsory to any
registered cooperative weather affiliated or not.

23. 9. Financial Inclusion Fund Policies
• In a bid to accelerate financial inclusion, it is
imperative for the cooperative sector to crate
a Financial Inclusion Fund and Financial
Inclusion Technology Development Fund
policy.

24. Confronting The Brutal Facts

25. Conclusions