Lets Talk Finance – National Financial Inclusion Strategy (Part 3)

Melanie Williams, National Financial Inclusion (NFI) Coordinator, speaks about the NFI Strategy.

The ministry of finance and the public service presents let’s talk finance a feature exploring the various elements of the economic program welcome again to let’s talk finance here on nationwide 90 fm my name is george davis and my guest this week she’s been with me for the past two weeks or three weeks strong melanie williams coming thank you so much for having me

George melanie is the national financial inclusion coordinator working out of the bank after me and for the past two weeks we’ve been talking about the financial inclusion strategy how it impacts the regular person or niraj americans of which she and i are members in case you are frowning that descriptor and she’s looked which is discussed how it affects msmes those

Doing agriculture those in light heavy industry how it dovetails with the other plans that the ministry of finance has implementing right now to develop the country and develop the economy and of course to lead to economic growth which is the ultimate goal we continued to talk about financial inclusion this week and i asked melanie in the year that you have been

Managing affairs from your office that that coordinating office what would you highlight as the successes and i won’t say failures and only say challenges that the implementation of the strategy hasn’t counted well successes have been in terms of the ability to build out a very strong network of public sector entities that are committed to the financial inclusion

Strategy actually seeing changes that that are expressed in in the regulatory space being translated into the development space for example coordination between boj and the development bank of jamaica that increasing coordination that revision of how we treat with with matters such as risk weighting of the partial credit guarantee that can in fact improve greater

Access to credit and for for businesses we’ve also seen a change in the conversation whereby with brought the regulator’s the the public sector entities into closer dialogue with the jamaicans who are to be the beneficiaries of the strategy for the national consumers league there’s been a lot of frank discussion there’s been discussion with a number of industry

Associations that allowed us to reframe certain action items and design specific policy steps that are to be taken a major arm gain has been for example in the world of consumer protection we have benefited from the involvement of our partners in the us treasury but we’ve also benefited from the involvement of the consumer affairs commission as well as a national

Consumers league that jamaica bankers association the industry representatives for the microfinance institutions to really understand what are the most critical factors that have to be addressed as we seek to actually create a much more comprehensive consumer protection framework which is in train and that is to be finalized in the course of this year in terms of

The policy proposals that will go to the ministry another great win we’ve had is through the leadership of the ministry of education information it’s sorry if i may say again the ministry of education youth and information right and we’ve had great involvement from their leg secretariat with our involvement from the heart trust we’ve also had involvement indeed

From the ministry of finance where we actually were able through the help of the inter-american development bank to create a national financial literacy action plan and an intermediate strategy which would of course have budgetary implications but will see us targeting or youth through a segmented approach from primary to secondary to tertiary level because it’s a

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Long-term investment and of course we’ve seen it on the ground in terms of how we measure indicators greater number of access points for persons seeking to access financial services the agent banking regulations having been passed we also see the use of electronic retail payment products the continued the use of those types of instruments in the marketplace and we

See our young people becoming more aware because both in terms of the alpha generation as we call them which is all our children were born post-2000 as well as or millennials they are the ones who are digital natives and they are changing the conversation changing how we do financial and so we’ve seen a shift in the psyche of the financial institutions themselves to

Better understand that population because we have a very young dynamic population and the greatest gain of all is a celebration of the entrepreneur as a central point around which the economy has to be built and that’s driving a lot of the policy development now before we come to the challenges though let me interject the you spoke i think was in the first segment

You mentioned the benefit of jamaica moving towards becoming a digital society i think your phrase digital economy yes i’m looking broadly to say digital society how does the advent of the digital society and so many of jamaica’s population being off a and in step with the latest technological gathered gadgets and the latest technological advancement helping them

To understand things of the nature that we are discussing how do you think that benefit returns to give an impetus to the plans to let financial inclusion strategy bet in to the jamaican economy and development and then the main games to be hard from a digital economy efficiency greater efficiency the ease of which you can actually enter into discussions our own

Business negotiate terms and finalized terms the ability to have your electronic signature recognized you know we have electronic transactions act and have that being used as a tool to actually move the business along faster it’s also important when we consider the flows of funds how are we able to facilitate that within the jurisdiction as we continue to look at

Other mechanisms such as revising having a risk-based framework for a timoni laundering and co2 financing of terrorism so that we recognize different financial products have different risk thresholds if you will based on their product design their targeted audience so that it’s not a one-size-fits-all the digital economy is forcing us to have greater nuance it’s

Forcing a greater understanding of the role of information and technology and speed efficiency and also fast resolution and of course very very critical record-keeping and then accessing those records real time exactly and having them store electron yes so that you can access them what it means for the jamaican of course is that you know bank differently you

Know do business different in terms of payment you know go and you are you are self-directed in terms of how you see how you seek to actually engage with your consumer how you seek to communicate your message and your brand and then how do you seek to actually facilitate their payment so that your customer is now communicating to you in a different way and you

Therefore continue to adapt so that’s part of the change that we expect to have happen as we move towards a digital economy which means that we need to have our products move alongside that that continued agility that you see mm-hmm all right beyond those though they i don’t want to say failures again i want to say challenges some things that you’ve noticed in the

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Implementation that you think you know you could be further along where those removed or a certain kinks ironed out what would you think put your finger on as those challenges limitations then to the successful implementation or even more speedily right the challenges and limitations we continue to face are the the within our public sector stakeholders if you will

The issues associated with the sources the capacity to arise people as well as ideas to respond to the to the needs of the market the shift in thinking we see some of our public sector entities being very far ahead in the curve in terms of already conceptualizing how they’re adapting to this new world is new space my craft ministry of finance a number of entities

Are like that is dbj we need to have more of that the importance of proportionate regulation the importance of not having a one-size-fits-all regulation and also properly placing the the creation of a regulatory framework in the context of the business of a market development strategy because that’s what financial inclusion is designed to achieve another impediment

We have found and this is something that we’re actively trying to remedy is getting the message out there it’s the communication making sure that the average american understands that financial inclusion is not about charity it’s not about giving away money but empowering or businessmen women in the space already so that they have access to proper financing and

We bring all competent businesses and all financial institutions that want to have proper formal systems in place in the same environment so that they can compete fairly and equitably for the access to the consumer so it’s about competition and about changing the frame of reference those have been our major challenges making sure that we actually are able to

Move ahead with resources and i think thirdly we need to continue to work closely with the private sector we have seen that as the economy has improved it seems to have caught some of our participants by surprise yes they didn’t think that the change would be sustainable but it is it’s showing four years now continued economic growth we can now actually start to

Think of a different future and so now you’re seeing businesses adjust as well as the financial institutions adjust and we want to encourage more of that and hopefully it will continue to increase in terms of the speed of research and design and development of new products so that they can meet the needs so those are the challenges that we face are there other

Countries of a similar profile as jamaica which well which have embarked on financial inclusion embedding as we have done and have achieved significant successes that you could look on and so well based on that blueprint we are trending in the right direction well we know of within the region that you have a national financial inclusion strategy be implemented in

Mexico as well as in peru but jamaica remains the first in the english-speaking region to actually have such a strategy and they too are at the earliest stages of realizing some of the dividends from implementation where we stand is that certainly greater gains have been made in mexico for example through their secured transactions regime and that’s something that

We’re learning from through the involvement of the international finance corporation and my caf’s role in coordinating that that sharing of knowledge you know there’s been a close collaboration between bank of jamaica my coffe dbj and the ifc that allows for us to now see how we can better leverage secured transactions in a different way so that we can create an

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Environment that actually encourages financial institutions to actually engage in new product offerings more factoring more and more use of asset based lending products these are some of the earliest thoughts we want to get to where mexico is i think in terms of that change but certainly in the caribbean we should feel very comfortable and confident that jamaica

Being the first mover so to speak in the financial inclusion space is also the first movement to implement in this way given our regional constraints and realities as so as we as we pull closer to 2020 30 fish in 2030 i’m not trying you 20 dates what i’m just saying for the purpose of the conversation what about 2025 when what you were doing know what is being

Done know where financial inclusion is concerned when those take root wrong about 20-25 2030 that’s when the real benefits will be seen because as you would admit know given that the implementation is only young the benefits that you could hold up to say ah here are the clear signposts that financial inclusion has achieved that what we realize no it is later down

The road it is certainly going to be a measured pace of realisation of benefits of dividends if you will yes one of the key changes we’d like to see is of course greater participation in in our stock market we’d like to see i’m going to investment flows more angel investors coming in in this space to help our micro entrepreneurs we would envision a world within

Which our micro financial institutions are fully regulated in the sense of having a regulatory framework that benefits them and benefits their legitimate business in in the space we would also like to see a more robust consumer protection model and different types of products we want to see a greater uptake of digital payment mechanisms and greater confidence in

Using them there there tends to be a level of fair and so a lot of what’s going to be we’re going to invest our activities in next year-and-a-half we’ll be doing is educating our population about the challenges the threats as well as the benefits to be had about using the technology and how they can better understand and leverage it to their business needs so a

Lot of this is going to be changed change in thinking changing behavior and at the same time changing conversation we have to meet the needs of our clients so to speak and our clients in this case would be the population of jamaica excellent melanie you’ve been a wonderful guest you’ve been very articulate you’ve been very clear and i’m sure the listeners have

Enjoyed listening to you thank you for having me george because i’m very kind thank you very well malinda williams she is the national financial inclusion coordinator working out of the office of the bank of jamaica and she has been my guest for this program and the previous two unless talk finance avis’s we’ve looked at the financial inclusion strategy that’s it

Good bye that was let’s talk finance brought to you by the ministry of finance and the public service

Transcribed from video
Let's Talk Finance – National Financial Inclusion Strategy (Part 3) By Ministry of Finance Jamaica