AFI members take top spots in Economist Intelligence Unit’s Financial Inclusion Rankings

Christopher Hughes

Superintendent Daniel Schydlowsky has helped Peru become a leader in financial inclusion.

Superintendent Daniel Schydlowsky has helped Peru become a leader in financial inclusion.

The Economist Intelligence Unit’s recently-released Global Microscope 2014: The enabling environment for financial inclusion report saw Alliance for Financial Inclusion (AFI) member institutions making a difference and claiming the top spots when assessing the regulatory environment for financial inclusion across 12 indicators and 55 countries.

AFI members make up 18 of the 20 top-rated nations, including nine of the first 10.

Not surprisingly, seven AFI members from the top 10 countries made specific commitments to the Maya Declaration, including Peru, Colombia, the Philippines, Chile, Mexico, Pakistan, and Tanzania. (More than 90 such countries—representing more than 75 percent of the world’s unbanked population—have supported the Maya Declaration, a measurable set of commitments by developing governments to increase financial inclusion.) India and Bolivia are the other two members from the Network in the top 10.

Peru finished first in the index, with an overall score of 87 out of 100. La Superintendencia de Banca, Seguros y AFP (SBS), the organization responsible for the regulation and supervision of the Peruvian financial system, has been a long standing member of the AFI Network. At the 2014 Global Policy Forum (GPF), it was announced that SBS’s top official, Superintendent Daniel Schydlowsky, will be AFI’s new Steering Committee Chair.

Colombia was ranked second overall at 85, while the Philippines rounded out the top three with a score of 79. Both Peru and Colombia showed strength across the board, ranking in the top five in most of the indicators, while the Philippines received a score of over 76 for eight of the 12 indicators.

The study’s findings show that Colombia and Peru are worldwide leaders in prudential regulation and rules for deposit-taking and have strong records in microcredit. Peru has remarkable institutional support for financial inclusion, especially good regulatory and supervisory capacity, credit-reporting systems and client- protection rules. Colombia is one of the leaders in the regulation of micro-insurance, along with India, Mexico and the Philippines.

Conclusions also indicated East and South Asia and Sub-Saharan Africa are leaders in the area of regulations of electronic payments. Top global finishers include Bangladesh, Kenya and Bolivia, with the adoption of comprehensive and conducive regulation of e-money and mobile payments. Meanwhile, in Pakistan, mobile transactions are growing rapidly, supported by regulation resulting from the joint effort of the regulator and the industry. Kenya is an important member of AFI’s African Mobile Phone Financial Services Policy Initiative (AMPI), which was created to be the firm platform for AFI member institutions in Africa to provide high-level leadership in the overall development of mobile financial services (MFS) policy and regulatory frameworks, and to coordinate efforts of regional peer learning. This in turn broadens knowledge and promotes MFS policy development throughout the entire AFI Network.

This year’s Microscope demonstrated a new indicator framework that considers products and institutions beyond microfinance to reflect financial inclusion more broadly. The Microscope 2014 is the first edition that focuses on financial inclusion, evaluating the conditions and enablers of expanded access to finance to establish a benchmark across countries.

This enhanced version of the Microscope is directed towards practitioners, policymakers and investors, to help evaluate countries’ progress in achieving financial inclusion, and to establish where further efforts should focus in order to yield additional benefits. Conceptually, the Microscope measures the national environment for financial inclusion by using the following criteria: the range of financial products and services offered; the diversity of institutions offering them; the array of delivery methods; and the institutional support that ensures the safe provision of services to low-income populations.

To view the whole report, download here.

Christopher Hughes is the Online Communication Manager at the Alliance for Financial Inclusion.

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