Presented on May 7, 2015 during the first AFI Pacific Island Regional Initiative (PIRI) meeting of central bank governors in Dili, Timor-Leste

1. Innovation of Financial Services in the Pacific
Islands
John Owens, Senior Policy Advisor, AFI
PIRI Meeting, Dili, Timor-Leste, May 2015

2. Benefits & Opportunities of
Digital Financial Services
Source IFC Infographic: Bonny Jennings www.itldesign.co.za IAFI | Alliance for Financial Inclusion

3. AFI | Alliance for Financial Inclusion
 E-money Services
 Mobile Financial Services
 Use of Agents
 Innovations in Cross Border
Remittances
Key Innovative Financial
Services in the Pacific Islands

4. E-Money Services in the Pacific Islands
• E-money being issued
by banks and non-banks
• Opportunity to reach
new clients via mobile
phones
• Several value-added
propositions
• Challenges and low-
uptake

5. Use of Agents
 Offered by Banks & Non-
banks
 Client registration
 KYC outsourcing
 Remote account opening
 CICO
 Payments/Basic Banking
Services
AFI | Alliance for Financial Inclusion http://blog.microsave.net/wp-content/uploads/2014/03/mor-lks2.jpg
http://www.developmentoutlook.org/2012/11/analyzing-business-correspondent-model.html

6. Innovative Cross Border Remittance Services
• De-risking has had a
direct impact on the
costs of remittances to
the Pacific Islands
• MTOs vs Banks &
Traditional Players
• New technologies and
players bringing
promise to cross
border remittances
Branchless Banking Alternatives
• Technological innovations FX
operator KlickEx, Abra
• Gift cards to particular stores
(Regalii in the Dominican
Republic) or to make bill
payments for recipients
(Willstream in Senegal)
• Online transfers using social
media, through senders such as
Azimo, Fastacash, Facebook

7. DRAFT – for discussion only
International Remittances through
Branchless Banking Models
7
Mobile cash-out models Card-based models
1 Bancolombia Colombia
2 Banglalink Bangladesh
3 bKash Bangladesh
4
Boom
Financial
Mexico
5 Digicel Fiji
6 Digicel Samoa
7 Digicel Tonga
8 GCASH Philippines
9 INOVAPAY
Burkina
Faso
10 Maroc Morocco
11
MB Mobile
Money
Vietnam
12 Mikemusa Zimbabwe
13 M-Paisa Afghanistan
14 MTN Ghana Ghana
15
MTN Cote
d’Ivoire
Cote d’Ivoire
16 MTN Rwanda Rwanda
17 Telma Mvola Madagascar
18 Orange Money Madagascar
19 Orange Money Mali
20 PLDT Smart Philippines
21
Safaricom M-
PESA
Kenya
22
Telenor
EasyPaisa
Pakistan
23
Tigo (El
Salvador)
El Salvador
24
Tigo
(Guatemala)
Guatemala
25 Tigo (Paraguay) Paraguay
26 Vcash Nigeria
27 VNPT iPay Vietnam
28
Vodacom M-
Pesa
Tanzania
29
Vodafone M-
PAiSA
Fiji
30
Wafacash
Allocash
Morocco
31 Wanda Argentina
32 XL Tunai Indonesia
1
iRemit Visa
Card
1 Philippines
2 Mango Money
1
Global
3
Mastercard
Moneysend
1 Global
4 RegaloCard
Central
America
5 Transfercel
Central
America
1 iSend
Central
America
2 moWoza SSA
3 Regalii
Dominican
Republic
4 Willstream Senegal
Directed transfer models
1 2
3
1.Although these deployments enable branchless cash-out, research indicates that they require the recipient to have a bank
account that is connected to the pre-paid card

8. AFI | Alliance for Financial Inclusion
Convergence & Interoperability:
A driving force for Financial Inclusion
Financial
Inclusion

9. AFI | Alliance for Financial Inclusion
Mobile E-Money Driving Mobile
Banking As Well
2012
2006 13%
29%20 Million
bank accounts
4 Million
bank accounts
24 Million
registered mobile money users
Percentage of adults using a bank account in Ke

10. M-Shwari: Mobile
Money & Banking

11. Small Value and Credit Savings
M-Shwari, a savings and credit
product from Safaricom and
Commercial Bank of Africa (CBA)
has registered a phenomenal
uptake.
The product enables M-PESA
subscribers registered for at
least 6 months to get a loan,
anywhere from
$1.15 to $235
for a 30 day term
instantly into their e-wallets.
AFI | Alliance for Financial Inclusion
US$ 1.7
billion
1st largest
bank in
terms of
accounts
US$ 322
million in
loans
35,000 to
10M in 2
years

12.  Reporting requirements must be clear and focus on the
information needed to:
 Assess whether service providers are sound
 Risk management protocols are effective
 Consumer protection policies are adequate
 Regulators should be careful to avoid excessively
burdensome and overlapping requirements, which may
stifle innovation and limit market competition.
Key Regulatory Policies For DFS
AFI | Alliance for Financial Inclusion

13. 1) Risk management frameworks and resulting data for
risks pertaining to operations, liquidity, money
laundering, and terrorist financing
2) Consumer protection
3) Public disclosure of information
4) Outreach and financial inclusion
Four Key Areas in Digital
Financial Services Reporting
AFI | Alliance for Financial Inclusion

14.  Proportionate
AML/CFT
– Tiered KYC Regulations
 E-Money Operator
Regulations
 Remote Account
Opening Rules
 Agent Regulations
 Interoperability
Key DFS Regulatory Options to
Support Financial Inclusion
AFI | Alliance for Financial Inclusion

15. info@afi-global.org
www.afi-global.org
Thank you!
John.Owens@afi-global.org
@jvowens