1. Global Trends and Challenges on Financial Inclusion Conference on Financial Inclusion: Challenges and Issues for the Deposit Insurer Alfred Hannig, Alliance for Financial Inclusion (AFI) Manila, June 20, 2013

2. Overview of AFI Founded in September 2008, AFI is a global network of policymakers in emerging and developing countries AFI is dedicated to accelerating the adoption of innovative financial inclusion policy solutions with the ultimate aim of making formal financial services more accessible and useable to the billions of unbanked people AFI provides members with the tools and resources to share, develop and implement their knowledge of cutting-edge policies

3. The Alliance for Financial Inclusion 108 Institutions, 89 countries Unique Peer Learning network (working groups) 7 policy areas More than 35 tangible policy changes Financial Inclusion as mainstream international policy agenda Maya Declaration Concept designBuilding the Network Activating the Network Enhancing Network value Policy-Driving Network 2008 200920102011 2012

4. Overview of AFI Global Data on Financial Inclusion Trend 1: Financial Inclusion as part of regulators mandate Trend 2: Expansion through innovative use of technology Trend 3: Focus on improving financial inclusion data Trend 4: Focus on quality Trend 5: Redefining Global Standards with SSBs Trend 6: Countries make measurable financial inclusion commitments Overview

5. Click to edit Master title style Click to edit Master subtitle style 2.5 billion of adults do not have access to formal financial system Source: World Bank – Global Findex. Based on the question: do you have an account at a formal institution Global Data on Financial Inclusion

6. Source: World Bank-Findex, CIA yearbook. Based on question: account at a formal institution. 2.5 billion of unbanked and that is just an estimate, it could be much higher. Main reported barriers to access are cost of services, physical distance to access points and lack of documentation. Data shows potential of technology and innovation to overcome barriers Huge untapped market Global Findex Database with data from 148 countries. Key findings : Global Data on Financial Inclusion Distribution unbanked population (age 15+) per country income

7. Global Trends and Challenges on Financial Inclusion Trend 1: Financial Inclusion as part of regulators mandate Financial Inclusion is no longer only a development concern but a cornerstone of economic development framework and model; Financial inclusion is a policy goal complementary to stability, integrity and consumer protection; Financial Inclusion is understood in a broad framework including access, usage and quality of a range of financial services. No. of Countries Have dedicated financial inclusion strategy 31 Financial Inclusion is part of institutional mandate 17 Created a dedicated financial inclusion unit 22

8. Rationale: technological innovation to reduce cost of delivery and expand access and usage on a large scale Example M-Shwari (Kenya): Interest bearing saving accounts and small loans via mobile phone Account opening and loan disbursement immediately over the phone Cooperation between Safaricom and the Commercial Bank of Africa Credit scoring algorithm based on voice data, payment of phone bills and savings history Total > 10 million USD saved in the first two months Global Trends and Challenges on Financial Inclusion Trend 2: Expansion through innovative use of technology

9. Source: http://www.gsma.com/mobilefordevelopment/wp-content/uploads/2013/02/MMU_State_of_industry.pdfhttp://www.gsma.com/mobilefordevelopment/wp-content/uploads/2013/02/MMU_State_of_industry.pdf Number of live mobile money services for the unbanked by region 2001-2012 (year end) Global Trends and Challenges on Financial Inclusion

10. AFI Core Set of Financial Inclusion Indicators AFI Second Tier Set of Financial Inclusion Indicators and specific AFI Indicator Sets e.g. MFS, Quality, Pacific Islands FINDEX: First public database that consistently tracks peoples use of financial products across countries G20 Global Partnership on Financial Inclusion (GPFI) Subgroup on Data and Measurement Global Trends and Challenges on Financial Inclusion Trend 3: Focus on improving financial inclusion data

11. Rationale: service quality drives usage 50 AFI members call consumer protection a priority area 23 AFI members have made specific commitments related to consumer protection Many countries are undertaking specific programs in financial literacy and financial education G 20 Presidency of Russia emphasizes consumer protection and financial literacy Trend 4: Focus on quality Global Trends and Challenges on Financial Inclusion

12. While global standards are sufficient to allow proportionate application, they were originally not established with financial inclusion as a consideration; which can lead countries to adopt conservative approaches that limit innovation. Governor Amando Tetangco Jr., Governor of the Central Bank of the Philippines Trend 5: Redefining Global Standards GPFI and HM Queen Maxima have engaged with SSBs on financial inclusion and supported to catalyze the review of existing or formulation of new guidance Annual G-24/AFI Policymakers Roundtable Redefining risk with an extended risk framework A Different Role for SSBs – Toward Peer Learning Global Trends and Challenges on Financial Inclusion

13. Country commitments (Maya Declaration on Financial Inclusion) Key components of Maya Declaration Financial Inclusion strategy / action plan Supporting G20 Principles Evidence-based data Consumer protection and empowerment Proportionate regulatory framework Enabling environment/ Technology Partners World Bank Group: Financing / TA, Data, etc. DFIs: Investment, TA Knowledge providers: CGAP, Research institutions Private sector Donors GPFI Others Concrete and measurable individual commitments based on national circumstances Knowledge Leadership Cooperation Diversity Innovation Proportionality Framework Protection Empowerment AFI : Peer learning, Working groups Progress review, Support services Trend 6: Countries make measurable financial inclusion commitments Maya Declaration: The first global and measurable set of commitments on financial inclusion by developing and emerging countries Global Trends and Challenges on Financial Inclusion

14. Africa Latin AmericaAsia Pacific Central Asia & Europe Bank of the Republic of Burundi Banque Centrale du Congo Central Bank of Ethiopia Bank of Ghana Central Bank of Guinea Central Bank of Kenya Reserve Bank of Malawi Central Bank of Mozambique Bank of Namibia Central Bank of Nigeria National Bank of Rwanda Ministry of Economy and Finance Sénégal Bank of Sierra Leone Bank of Tanzania Bank of Uganda Bank of Zambia Banco Central do Brasil Ministry of Social Development Chile Ministr of Finance & Public Credit Colombia Banco Central del Ecuador Banco Central del Reserva & Superintendencia del Sistema Financiero El Salvador (joint commitment) Superintendencia de Bancos Guatemala CNBV Mexico Central Bank of Paraguay SBS Peru Microcredit Regulatory Authority, Bangladesh Bank Indonesia Reserve Bank of Fiji Bank Negara Malaysia Financial Regulatory Commission of Mongolia Central Bank of Pakistan Bank of Papua New Guinea Bangko Sentral ng Pilipinas Central Bank of Samoa Central Bank of Solomon Islands Reserve Bank of Vanuatu Central Bank of the Republic of Armenia National Bank of Belarus Middle East & North Africa Palestine Monetary Authority Overview of Maya Commitments 39 and growing….

15. Deposit Insurance directly contributes to financial inclusion by protecting small depositors and indirectly by heightening their trust in the financial system; Potential participation in proposed Peer Learning Program with SSBs and AFI members on extended risk framework (next activity Frankfurt conference on 28 June); Potential cooperation on financial inclusion review of IADI core principles? IADI and AFI

16. Thank you