Responsible Finance Forum

National Financial Inclusion Strategies: Current State of Practice

Dr. Nimal A. Fernando and Robin Newnham
01 October 2015
Source:  Alliance for Financial Inclusion

National financial inclusion strategies (NFIS) have gained a great deal of traction in recent years and are becoming an increasingly common policy approach of many member institutions in the Alliance for Financial Inclusion (AFI).

The Maya Declaration of 2011 contributed significantly to this heightened interest in national strategies. Of the 57 institutions that had made commitments under the Maya Declaration by the end of September 2015, 35 have committed to formulating and implementing an NFIS and of these 35 countries, 16 have already formulated one. Other evidence points to AFI members’ interest as well. A poll taken at the 2012 AFI Global Policy Forum held in Cape Town, South Africa, showed that 97% of respondents thought a national strategy was essential to accelerate financial inclusion. This surge in interest is also due to better available data on the acuteness of the financial exclusion problem and a better understanding of the power of strategic approaches to achieve financial inclusion objectives.

Policymakers’ overwhelming confidence in national strategies as a policy tool is demonstrated even more clearly by the growing number of countries that have already formulated one, or are in the process of doing so. At last count, 31 AFI members, or approximately 33% of the AFI Network (as of 20 May 2015), have an NFIS, and another 27 countries, or 28% of member countries, are at various stages of developing one. Of the 31 countries with an NFIS, 8 (26%) are low-income countries, 12 (39%) are lower-middle income countries, 10 (32%) are upper-middle income countries, while just one (Russia) is a high-income country.

This policy choice is supported not only by AFI, but also by the G20, the World Bank and regional development banks such as the African Development Bank, among others. AFI has provided grant support to a number of its members to prepare national strategies, or for related activities, such as conducting demand-side surveys and brainstorming workshops or participating in knowledge exchange visits to learn from the experiences of other countries. The G20 has supported the development of national strategies through the nine Principles for Innovative Financial Inclusion1