Just over two years ago, the Bill & Melinda Gates Foundation joined ITU to establish a Focus Group on Digital Financial Services for Financial Inclusion. The goal was to tackle some of the main challenges countries face when promoting access to finance through ‘mobile money services’ which have proved successful in a number of emerging markets.
The financial-services and ICT sectors are increasingly converging – and the aim of the Focus Group has been to bring all the key players together to build a common understanding of the route to broader financial inclusion.
The terms of reference at the outset of the Focus Group’s work were expansive enough to be intimidating. The scope of work was far too broad for any one initiative to cover. Yet, this broad scope of work has in fact proven to be the group’s greatest strength.
This Focus Group exceeded everybody’s expectations, producing a set of recommendations that will remain a key reference to financial-inclusion advocates for years to come. (See the video below to learn more.)
When asked what made this Focus Group unique, all of the group’s participants highlighted its diversity. This was the first initiative to bring together all the actors working in the interests of financial inclusion. We opened new lines of communication, and built a much stronger understanding of the components of the DFS ecosystem.
In the next phase of our collaboration, we will be certain that we are speaking on the same terms.
Introducing the Financial Inclusion Global Initiative
This next phase of collaboration will be a three-year programme in collaboration with the World Bank Group and the Committee on Payments and Market Infrastructure.
Following the final meeting of our Focus Group last week, we had the chance to meet in London for a seminar to discuss the follow up to the ITU Focus Group on Digital Financial Services.
The set of ITU recommendations produced by our Focus Group add to two other foundational sets of principles for financial inclusion: the principles for inclusive payment systems developed by the Gates Foundation’s Level One Project and the task force on Payment Aspects of Financial Inclusion (PAFI) convened by the World Bank Group and the Committee on Payments and Market Infrastructures (CPMI).
These three sets of principles together form the manifesto that will guide a new global initiative that we aim to launch next year.
The priority will be to assist selected countries in their pursuit of financial-inclusion targets. The main focus will be on implementation in order to achieve concrete results in terms of new accounts open by low-income individuals. We will continue to host annual symposia to share insight into countries’ experience with the implementation of the good practices identified by the ITU, PAFI and Gates Foundation principles, and these open symposia will also give us opportunity to explore emerging trends in the DFS space.
We also plan to establish three working groups to undertake more focused work, particularly in areas where we see need for more investigation, particularly on a cross-sector basis over short periods of time.
The first working group will look at unique ID and its relationship with financial inclusion. The second will study electronic payments and merchants’ acceptance of these payments. And the third working group will look at the ICT infrastructure underlying DFS, particularly in relation to security and quality of service.
The World Bank, CPMI, ITU and the Gates Foundation are expected to play leading roles in facilitating this three-year programme of collective action.
We have already developed quite strong country diagnostics tools to assess the specifics of the financial-inclusion challenges in various markets. And as we provide targeted assistance to selected countries as part of the project, these diagnostics will inform how to provide countries with the right solutions to meet their financial inclusion objectives.
The collaboration we have initiated in this Focus Group has contributed to the emergence of a network of stakeholders very aware of each other’s unique strengths. By working together, we can each play to our strengths, making mutually reinforcing contributions to financial inclusion.
Our Focus Group has successfully responded to a diverse set of challenges by mobilizing a diverse set of expertise. And we plan to move forward in exactly this spirit.
Sacha Polverini (@sacha279) joined the Bill & Melinda Gates Foundation’s Financial Services for the Poor (FSP) team in December 2012 as Senior Program Officer – Regulation and Policy. A graduate of University L.U.I.S.S Guido Carli in Rome, Sacha holds a Master’s degree in European Political Studies from the Universite’ Libre de Bruxelles. In addition he has completed the post-graduate management program at Solvay Business School, Ecole de Commerce de Solvay, Brussels.