6 - 12 July | Financial Inclusion Weekly News

AFRICA

Nigeria - launched the Economic and Financial Inclusion Initiative to transform into a $1 trillion economy by 2030. This initiative aims to combat poverty and drive sustainable economic growth, focusing on legislative interventions and policies to ensure financial access. Source: Tekedia. Policies should foster easy access to financial services for women to promote economic empowerment. Effective strategies include policy reforms, financial education, and supportive ecosystems. Source: The Guardian Nigeria Open Finance can enhance trade and financial inclusion by facilitating secure data exchange across providers. By adopting Open Finance principles, Nigeria can improve financial access, support trade growth, and empower consumers through transparency and choice. Key challenges include data protection, cybersecurity, and ensuring inclusive financial literacy. Source: Independent Nigeria. The informal sector contributes over half of Nigeria’s GDP, according to the Informal Economy Report 2024. Street vendors, artisans, and service providers form a significant part of this sector, though many struggle with low individual profits and limited access to formal credit. Government efforts aim to support these businesses and enhance their economic impact. Source: Punch Nigeria. Financial exclusion significantly hampers the growth of the informal sector, which relies heavily on non-institutional sources for funding. Enhancing access to formal financial services can drive economic growth, empower micro and small enterprises, and reduce income inequality. Effective policies and financial literacy initiatives are essential to address these challenges. Source: The Guardian Nigeria

Enterprise Life Nigeria is enhancing financial inclusion through insurance, emphasizing the need for financial literacy and tailored solutions. Their strategy includes leveraging technology and expanding branches to improve insurance penetration and protect against risks. This aligns with Nigeria’s growing formal financial inclusion, which reached 64% in 2023. Source: Punch Nigeria.

Ghana - MTN Ghana emphasizes the importance of partnerships with banks, microfinance institutions, and FinTech companies to create a robust SME ecosystem. These collaborations aim to develop innovative financial products and enhance digital solutions to support SME transactions, improve financial inclusion, and address credit risk. Source: BusinessGhana

Competitive collaboration between FinTech firms and banks is essential for accelerating financial inclusion, according to Philip AMOATENG (MBA,LL.M,FCCA) , Director of Telecel Ghana . By leveraging the strengths of both traditional banks and FinTech platforms, the sector can better serve unbanked populations, especially in rural areas, through enhanced interoperability and innovative financial services. Source: BusinessGhana.

Uganda - Equity Bank Limited 's Mama Credit Facility has transformed the lives of over 2,000 women in one year. The initiative supports business growth and financial stability through loans and training, significantly aiding micro, small, and medium enterprises. Success stories include businesses expanding into multimedia printing, timber, and real estate. Source: The Independent Uganda.

Stanbic Bank Uganda launched the Stanbic Unit Trust, designed to foster financial inclusion and wealth creation by allowing Ugandans to invest collectively in the capital markets. The trust offers accessible investment options with minimum contributions as low as Shs 100,000 and aims to diversify portfolios to minimize risk and maximize returns. Source: The Observer.

Kenya - Women's World Banking is advocating for increased inclusion of African women in banking to boost economic growth. They emphasize the need for microfinance programs, credit guarantee schemes, and financial literacy training to empower women-led enterprises, addressing the $42 billion financing gap and supporting nearly one billion excluded women. Source: The Star.

South Sudan - The Central Bank of South Sudan is promoting food production and financial inclusion by collaborating with commercial banks and state governments. The initiative aims to strengthen market systems, encourage local savings, and support agricultural lending. This strategy is part of broader efforts to enhance resilience, boost domestic food production, and address rural-urban economic disparities. Source: Sudan Tribune.

Zimbabwe - MojoMula Transfers, a new international money transfer service, has partnered with Ok Zimbabwe to launch its operations across the country. This service aims to provide efficient and accessible money transfer options for Zimbabweans, facilitating easier transactions and boosting financial inclusion in the region. The collaboration underscores the potential for innovative financial services to enhance economic participation and convenience for users. Source: The Herald.

Algeria - Brief updates on various topics, including developments in financial inclusion and economic policies in Algeria. Source: El Watan.

Cameroon - 150 traditional leaders in Cameroon have been trained in using financial services to promote financial inclusion within their communities. Source: News du Camer.

Madagascar - Madagascar aims to provide over 50% of its adult population with access to formal financial services within five years, as part of its financial inclusion strategy. Source: 2424.mg.

Regional

• TerraPay has partnered with enza to improve cross-border payments and promote financial inclusion in Africa. This partnership will utilize TerraPay’s extensive connectivity to over 2.1 billion mobile wallets and 7.5 billion bank accounts worldwide. It aims to simplify payments for African businesses and bring many into the formal financial ecosystem for the first time. Source: PYMNTS
• The West African Economic and Monetary Union (UEMOA) has formed a significant alliance to promote financial inclusion in the region. This partnership aims to enhance access to financial services for underserved populations, leveraging innovative financial solutions and collaborative efforts between public and private sectors. The initiative seeks to drive economic growth and improve the financial stability of member states by making financial services more accessible and inclusive. Source: APA News.

MIDDLE EAST

GCC - NOW Money has partnered with 萬事達卡 to promote financial inclusion by issuing payment cards for migrant workers. This collaboration aims to provide secure, accessible, and convenient financial services, integrating unbanked individuals into the digital economy. The initiative includes global acceptance, enhanced security features, and financial literacy resources to support the financial well-being of underserved communities. Source: Finextra.

LATIN AMERICA & THE CARIBBEAN

Mexico - Financial inclusion is essential for empowering economic prosperity in Mexico. Efforts include expanding access to digital financial services, enhancing financial literacy, and improving regulatory frameworks to support inclusive growth. Initiatives target underserved communities to integrate them into the formal financial system, thereby boosting economic opportunities and reducing poverty. Collaboration between government, private sector, and international organizations is crucial for achieving these goals and fostering a more inclusive economy. Source: The Banker Digital payments have a positive impact on personal income, according to the Bank for International Settlements. They improve accessibility and financial inclusion, helping individuals manage their finances more effectively. Source: Informador. BBVA en México reports that bad financial habits and prejudices keep many Mexicans away from formal credit systems, highlighting the need for financial education and trust-building measures. Source: BBVA.

Chile - The establishment of the Consolidated Debt Registry marks a milestone for Chile's financial system. This new law aims to enhance credit information management, improve risk assessment, and promote financial inclusion. By reducing information asymmetry, financial institutions can make more comprehensive evaluations, offer better terms, and develop new products. This initiative supports responsible financial behavior, providing consumers with better access to sophisticated financial services while protecting against over-indebtedness. Source: Diario Financiero.

Colombia - The article discusses the impact of financial education on women, emphasizing the need for inclusive financial practices to empower women economically and promote gender equality. Source: Uniandinos. The Financial Superintendent urged financial entities to lower mortgage rates to enhance accessibility and support housing affordability. Source: La República. The use of digital wallets in Colombia is growing, contributing significantly to financial inclusion by providing accessible financial services to more people. Source: Valora Analitik.

Dominican Republic - The Bancarizar es Patria initiative has enabled 1,300 people to open bank accounts, promoting financial inclusion and access to financial services. Source: Diario Libre.

Argentina - Banks are focusing on a federal agenda to reduce disparities, integrate fintech solutions, and clean up their portfolios. This aims to balance financial opportunities across regions and sectors. Source: ámbito.

ASIA

Bangladesh - SME Education Foundation and Oxfam have signed an MoU to boost financial inclusion for small businesses in Bangladesh, aiming to provide better access to financial resources and support for SMEs. Source: Apparel Resources

The transition from traditional money orders to digital payments highlights Bangladesh's shift towards a digital financial ecosystem. Mobile financial services and internet banking have significantly grown, boosting financial inclusion and economic participation, especially among rural populations and women. Despite challenges like digital literacy and infrastructure, the move towards digital transactions promises enhanced convenience and inclusivity. Source: The Daily Star. Digitisation is crucial for reducing costs and enhancing business efficiency, especially as Bangladesh transitions from Least Developed Country status. Digital solutions streamline operations, support e-commerce, and align with the government's vision for a "Cashless Bangladesh." Key areas include improved logistics infrastructure and a more efficient policy environment, benefiting various export-oriented industries. Source: The Financial Express.

India - The Economic and Political Weekly discusses how household debt inequalities persist despite increased institutional credit access. Lower strata households still rely on non-institutional sources, exacerbating debt concentration among wealthier segments, particularly in rural areas. Effective measures are needed to address these disparities and promote financial inclusion. Source: EPW. Civil society organizations are crucial in bridging the digital divide to ensure welfare equity. They help address systemic issues in direct benefit transfers (DBT), such as exclusion due to digitization errors and lack of digital literacy, by providing localized support and advocacy for marginalized communities. Effective collaborations between the government and CSOs can enhance social welfare delivery. Source: Hindustan Times. Personalized services are key to the success of banks, especially with 43% of retail credit demand from the 18-30 age group. Lenders must adopt hyper-personalized experiences, omnichannel journeys, and robust cybersecurity measures to cater to this tech-savvy demographic and drive financial inclusion. Source: Fortune India.

The Reserve Bank of India (RBI) 's Financial Inclusion Index (FI-Index) rose to 64.2 in March 2024, up from 60.1 in March 2023, showing growth across all parameters. The index measures access, usage, and quality of financial services, with significant improvements in the usage dimension, reflecting deepening financial inclusion. This comprehensive index incorporates data from banking, investments, insurance, postal, and pension sectors. Source: The New Indian Express.

Thailand - Ascend Money has secured $195 million in funding from Mitsubishi UFJ Capital Co.,Ltd. and Finnoventures FinancialServices Private Equity Trust I to expand its fintech footprint in Southeast Asia. This investment aims to enhance financial inclusion through digital financial services, leveraging the growing fintech ecosystem in the region. Source: AsiaTechDaily

Fintech can bridge the financial divide in Asia by providing sustainable lending solutions for underserved populations in rural and urban areas. Key strategies include a targeted segment approach, collaboration with traditional financial institutions, leveraging government-supported digital infrastructure, and using alternative data for credit decisions. These initiatives aim to enhance financial inclusion, promote fair lending practices, and support economic growth across diverse demographic groups. Source: Nation Thailand.

REST OF THE WORLD

West Bank - The European Bank for Reconstruction and Development EBRD has provided a $2 million loan to Palestine for Credit and Development (FATEN) to support women-led micro, small, and medium-sized enterprises (MSMEs) in the West Bank and Gaza. This initiative includes technical assistance to develop targeted lending mechanisms, aiming to enhance financial access and economic stability for women entrepreneurs in the region. Source: EBRD.

Serbia - EBRD and Banca Intesa Beograd have signed a €72 million financing package aimed at boosting the competitiveness and trade potential of businesses in Serbia. The package will support green transitions and promote financial inclusion by providing loans and guarantees to local enterprises, with EBRD covering up to 65% of each sub-loan. This initiative is part of the EBRD's broader efforts to support private-sector development and facilitate Serbia's transition to a green economy (EBRD).

Spain - CaixaBank emphasizes the importance of rural bank branches in offering financial services to prevent exclusion. These branches play a crucial role in providing personalized banking services, maintaining economic activity, and ensuring financial inclusion in rural areas. CaixaBank supports rural development by offering accessible financial products and fostering community engagement through these branches. Source: CaixaBank.

United Kingdom - The Labour Party plans to boost open banking adoption by reinforcing consumer protection, exploring financial resilience models, and regulating the Buy Now Pay Later sector. The initiatives aim to make the UK a leader in financial innovation and inclusion. Source: PYMNTS

The 英国伯明翰大学 and the Financial Inclusion Commission call for a National Financial Inclusion Strategy to address financial exclusion across the UK. The report highlights the need for better access to financial services, building financial resilience, affordable credit, support for at-risk individuals, and promoting savings for retirement and social care. The strategy aims to unlock economic growth, enhance household resilience, and reduce financial distress. Source: University of Birmingham.

Innovate Finance has unveiled a fintech growth plan aiming to contribute ￡328 billion to the UK economy by 2030. The strategy focuses on scaling up fintech companies, fostering innovation, and creating a conducive regulatory environment. Key components include improving access to capital, enhancing talent development, and strengthening international collaboration. This plan underscores the significant role of fintech in driving economic growth and maintaining the UK's position as a global fintech leader. Source: Innovate Finance.

The UK's Payments Association urges the government to enhance financial inclusion through community finance initiatives, such as credit unions. The report highlights the need for financial literacy, regulatory adjustments, and investment to empower financially vulnerable individuals. Proposed solutions include establishing a 'sandbox' environment for innovation and learning from international models to make community finance more accessible and effective. Source: Digital Journal.

United States - A The Brookings Institution 's report discusses how AI can both mitigate risks and harness benefits for financial stability. Key points include AI's potential to improve financial services efficiency, the importance of robust risk management frameworks, and the role of regulators in managing AI-related vulnerabilities. Source: Brookings

Federal Reserve System Vice Chair for Supervision, @Michael Barr, emphasized the importance of managing third-party risks in financial inclusion efforts. He highlighted that while fintech partnerships enhance access to financial services, they also pose risks that need careful oversight. Effective risk management and legal compliance are crucial to prevent disruptions that could harm vulnerable communities. Barr praised innovations like instant payment processing and open banking for their potential to improve financial inclusion but stressed the need for regulatory diligence. Source: American Banker.

GLOBAL

• Blockchain technology can significantly boost financial inclusion by providing transparent, secure, and efficient financial services to underserved populations. Projects like BankSocial and morph focus on integrating decentralized finance (DeFi) with traditional finance (TradFi) and creating value-driven decentralized applications (DApps) for emerging markets. These efforts aim to reduce cross-border friction, enhance financial access, and support economic empowerment globally. Source: TradingView.
• UNHCR, the UN Refugee Agency highlights the need for well-coordinated public-private partnerships to advance financial inclusion for displaced persons and their host communities. These partnerships should align business interests with humanitarian and development goals, leveraging the strengths of each sector. Key elements include defining shared problems, setting common goals, building trust, and combining capacities to deliver sustainable outcomes. Successful initiatives can enhance local economies, improve well-being, and create inclusive financial systems. Source: UNHCR.
• The Islamic Financial Services Board (IFSB) plans to develop new financial inclusion guidance to enhance the implementation of Islamic finance standards. This initiative aims to provide benchmarks and concrete steps for regulators, focusing on areas such as Islamic reinsurance, capital markets, stress testing, and liquidity issues. The goal is to better integrate Islamic finance into the global economy and support its growth in both Muslim-majority and new markets. Source: Reuters.

#FIFRIDAY #financialinclusion #digitalinclusion #socialinclusion

Disclaimer:
The Financial Inclusion Forum compiles news from various sources to provide a comprehensive overview of recent developments in financial inclusion. While we strive for accuracy, the views expressed in these articles are those of the original authors and do not necessarily reflect the views of the Financial Inclusion Forum or its members. We do not assume responsibility for the content or accuracy of external websites.