Several Southern African Development Community (SADC) Member States have developed financial inclusion strategies which seek to provide financial services for the economically underprivileged people.
This came out of a panel discussion held during the annual SADC Regional Financial Inclusion Forum in Johannesburg, South Africa, which was attended by senior-level representatives who work on financial inclusion within the Ministries of Finance, Central Banks, Non-bank Regulators and the private sector. The financial inclusion strategies are aided by the Support to Improving the Investment and Business Environment in the SADC Region (SIBE) Programme, which is supported by the European Union.
The discussion facilitated by Mr Rado Razafindrakoto, Programme Officer Financial Sector in the SADC Secretariat, had panelists from Malawi, Botswana, Eswatini and Zimbabwe presenting key insights regarding the implementation of their national financial inclusion strategies, considering the successes, challenges and drivers of financial inclusion in their countries.
Ms Nancy Mpila from the Ministry of Finance in Malawi said the key drivers of financial inclusion in her country are mobile money and financial education. She said to date, Malawi has implemented two National Financial Inclusion Strategies; NFIS I (2010 -2014) and NFIS II (2016 -2020), and that the development of NFIS III (2022 – 2026) is underway. NFIS I prioritised expanding the reach of digital payments; expanding savings and investment opportunities; and expanding finance for MSMEs and agriculture.
The NFIS II (2016 -2020) strategy was successful in achieving access to at least one formal financial service which increased from 34% to 46% in 2018 but below the target of 55% by end of 2020. The strategy increased access by women to at least one formal product from 29% to 36%; reduced financial exclusion from 51 to 22%; the financial literacy index increased from 3.6 to 3.9 in 2018; and the number of access points and 30-day active users of DFS increased.
In Botswana, the National Financial Inclusion Roadmap and Strategy was developed using key insights from FinScope and Making Access Possible (MAP) research to gauge the level of financial inclusion, according to Mr Walebatla Kgwakgwe from the Ministry of Finance. The priority areas are developing the payment ecosystem, facilitating low-cost accessible savings products, developing accessible risk mitigation products, improving the working of the credit market, and consumer protection. Through the strategy, Botswana was able to achieve growth in e-money and remittances; expand targeted savings products; and improved accessibility of insurance products, among others.
In Eswatini, Ms Nomcebo Hadebe from the Ministry of Finance, said data from FinScope surveys and MAP diagnostics, amongst others, has been crucial in the identification of areas of intervention and the tracking of financial inclusion indices. The Eswatini NFIS (2017 – 2022) was aligned with the national development goals and accounts for seven UN Sustainable Development Goals (SDGs). Key areas of priority in Eswatini consist of mobile money, remittances, bank and formal financial services reach, risk mitigation, and access to credit.
Additional focus has been placed on forcibly displaced persons, consumer credit regulation, review of credit guarantees, financial literacy, and frameworks for credit information sharing. However, there are challenges which still need to be overcome to continue to advance financial and economic inclusivity in the country. These include lack of government commitment; need for tailor-made products; no clear monitoring and evaluation frameworks; climate challenge; and the informality of SMEs.
Ms Rachel Mushosho from the Reserve Bank of Zimbabwe said the key pillars of her country’s NFIS I (2016 – 2022) are consumer protection, microfinancing, financial literacy, and financial innovations, focusing specifically on SMEs, small-holder farmers, youth, women, and people with disabilities.
Key lessons learnt were that a harmonised approach among all stakeholders is critical to pursue goals and objectives of a NFIS; that robust monitoring and evaluation frameworks is important; the need for sufficiently disaggregated data, and for an NFIS communication strategy which will be key to facilitate the dissemination of information on national financial inclusion activities.
