Bringing Smart Policies to Life

1. Bringing Smart Policies to Life

2. AFI at a glance Why we were created How we add value AFI in more detail – strategic focus, progress & outlook • Overview

3. AFI is a global network of policymakers in developing countries. We provide our members with the tools and resources to share, developand implement their knowledgeof cutting-edge financial inclusion policies that work. Founded in 2008, officially launched September 2009: Our goalis to support developing country knowledge exchange on financial inclusion policy that will enable an extra 50 million people living under the poverty line to have access to formal financial services by 2012. As of 2010, AFI has members from Central Banks and leading financial regulatory institutions in over 40 countries, with institutions from an additional 40 countries also showing interest to join. This represents nearly 90% of the world’s unbanked population. • AFI at a glance

4. Greater financial access is in everyone’s economic and social interest (win-win) The scale of the opportunity is huge, especially in today’s economic climate Solutions are already there - need to be shared • Why we were created

5. % of households without access to financial services >80% 60-80% 40-60% 20-40% <20% The scale of the opportunity is huge About half of the world’s population (~2.5 billion) is “unbanked” Source: World Bank Composite Measure of Access to Finance 2007, AFI visual modification.

6. Developing countries have pioneered many of the most innovative solutions Peru: Consumer Protection Thailand: Public bank reform Malaysia: Consumer Protection Philippines: M-banking (G-Cash, Smart Money) South Africa: 1. M-banking 2. Consumer Protection Mexico: Public bank reform • Brazil: • 1. Agent-banking • 2. Public bank reform Kenya: M-banking India: Public bank reform Indonesia: 1. Public bank reform 2. Diversifying products and providers (BPR) Bolivia: Diversifying products and providers (FFP decree) Uganda: Diversifying products and providers (MDI law) Knowledge of the solutions is scattered across the globe

7. Nearly 200 financial inclusion players: who to use and when? Policymakers face a bewildering choice of partners

8. We bring together all the pieces of the puzzle How AFI adds value • We connect the knowledge…resources …and the right strategic partners at the right time • … so that policymakers can select, develop and implement the best solutions for their countries’ individual circumstances. • In short, we optimize the flow and quality of knowledge, enabling policymakers and partners to optimize the impact of their resources.

9. Enable policymakers in developing countries to share and develop their knowledge of cutting-edge policies that deliver tangible results Online and face-to-face meetings (regional and global) All learnings captured centrally so others can benefit Focused on evidence-based policy areas Provide policymakers with grants to develop and implement their chosen solutions Short-term grants: e.g. diagnostic studies, drafting regulations Longer-term grants: e.g. implementation and impact assessment Connect policymakers with the right partners across the value chain From research institutes (e.g. NYU) and technical experts (e.g. CGAP) to funders (e.g. World Bank) and the private sector (e.g. GSMA) What we do

10. Facts & figures Members Policy focus Knowledge exchange Grants Strategic partners AFI in more detail

11. Facts & figures Established Funding source Total Budget Number of Grants Time frame Geographic reach Location • September 2008 • Bill & Melinda Gates Foundation • $35M over 4 years • 21 long-term grants • 44 short-term grants • Sept 2008 – Sept 2012 (phase one) • Developing countries around the globe • Bangkok, Thailand

12. AFI Members Uzbekistan Russia Iraq Syria Lebanon Mongolia Palestine Kyrgyzstan Tunisia Tajikistan Afghanistan Morocco China Mexico Jordan Pakistan Dominican Republic Nepal Mali Algeria Bangladesh Guatemala Egypt Senegal Laos India Honduras Niger Yemen Vietnam Burkina Faso El Salvador Sudan Ethiopia Cambodia Guinea Nicaragua Uganda Sri Lanka Sierra-Leone Kenya Philippines Togo Costa Rica Cote D‘Ivoire Rwanda Papua New Guinea Colombia Panama Burundi Tuvalu Maldives Peru Brazil Benin Indonesia Solomon Islands Bolivia Vanuatu Samoa Madagascar Nigeria Fiji Tanzania Tonga Thailand Ghana Cameroon Timor-Leste Malawi Uruguay Gabon Mozambique Malaysia Congo Namibia Zambia South Africa DR Congo Official AFI members In the process of joining

13. Support all effective, evidence-based policies. Focused set including: Policy focus Channels Enablers Financial identity Facilitate building and use of financial identities for poor clients Agent banking Enable non-bank agents to provide financial services New policy areas will be added as fresh evidence emerges. Consumer protection Promote policies that provide adequate consumer protection and education in financial services Mobile phone financial services Increase access to financial services through mobile technologies Public bank reforms Enable state owned institutions to effectively provide financial services to the poor Formalizing Micro-savings Facilitate adoption of new providers and products for promoting micro-savings Data & measurement Facilitate increase and improvement financial inclusion data – critical for devising evidence-based policy

14. Online and face-to-face, aided by grants Knowledge exchange Face-to-face exchanges Online exchanges National activities Global activities Regional activities Regional working groups Policy champion pools Peer reviews Discussion forums Web conference Working interactions South-south exchange Regional access conferences Global seminars per policy area National seminars Online database Policy help desk/Blog Knowledge-sharing forums Global policy forum Research Papers/Policy briefs Publications and presentations Publications E-newsletter

15. Short-and long-term, covering the full policy cycle AFI Grants Knowledge Exchange Grant to the Russian Microfinance Center for Russian policymakers to visit Brazil to learn about agent banking and its regulations • Regional seminars • Study tours • Peer reviews Grant to Treasury of Pakistan for short-term assistance for drafting mobile phone banking regulation AFI Grants Long-term Short-term Grant to Bank Indonesia for developing innovative financial identity policy for the poor • Diagnostic studies • Draft regulations • Training • Develop and implement new regulations • Impact assessments

16. An effective and impartial, end-to-end process Example: Long-term grant Grant assessment panel reviews proposal Grant approved and next tranche disbursed Internal panel appraises project proposal Grants Approved Approved Applicant develops proposal with assistance from program manager Potential grantee prepares concept note Potential first tranche (up to 20k) distributed Internal panel reviews concept note Discussions with policy makers Conditional Rejected No go “Light process” - maximum 5 pages

17. Support across the value chain, from policy design to implementation Donors/Technical assistance E.g. DFID, CGAP, BMZ/GTZ, USAID, World Bank, AFD, JICA AFI Policymakers Standard setters E.g. BIS, FATF, IAIS Private sector E.g. ABAC, GSMA, Omidyar Network, Vodafone Microfinance industry E.g. Accion, FINCA, Grameen, SEEP Strategic partners Research partners E.g. CENFRI, University of Chicago, Yale,Finmark, Harvard, NYU, FAI, OPM

18. Milestone - Global Policy Forum 2009 Progress Moving forwards Progress & outlook

19. The first gathering of our members & strategic partners AFI Global Policy Forum 2009 • Concept • Following the value chain of financial inclusion policy-making • Knowledge-sharing among policymakers • Practical solutions • Innovative, interactive, member-driven • At the Forum • Over 80 policymakers from 37 countries • High-level speakers and participants (Prime Minister, Governors, Deputy Governors etc.) • 80 strategic partners • Active engagement & intense discussions • Positive feedback on the Forum (99% satisfied) • Very supportive of AFI and our new approach

20. Key orientation for 2009: Building AFI and its Network Organizational structure in place Steering Committee members appointed: Kenya, Mexico, Philippines, Thailand Management unit in Bangkok Well-developed operational systems Grant-making procedure established Interactive web site and online network platform under development Rapidly expanding membership base Central banks and regulatory institutions from 40 countries have already joined* Institutions from additional 40 countries have shown interest to join Variety of grants already approved E.g. Kenya-Brazil, Afghanistan-Philippines knowledge-exchange grants First long-term concept note approved for Russia on agent banking More grants in pipeline Growing AFI profile Network has gained global recognition, resulting in active involvement in a number of high-level processes (including G20) *Figures as of April 2010 Progress so far

21. Key orientation for 2010: Activating the network and delivering services AFI working groups to be launched 4 working groups identified so far (M-banking, Pacific, AML/CFT, and Financial Inclusion data) AFI web site revamp and online network platform launch Online platform will provide members with a range of knowledge sharing and connecting features AFI Policy Notes and Policy Briefs Notes and briefs on policy focus topics will be launched; policymakers invited to contribute AFI Policy Champion Program to be launched M& E system established, grant programs fully in place AFI Membership Needs Assessment and Financial Inclusion Policy surveys launched Contribution to the G-20 Working Group on Financial Inclusion Experts Group/ATISG Next Global Policy Forum: September 2010 Will be shaped and driven by policymakers; practical, interactive, results-oriented *Figures as of April 2010 Moving forward

22. Thank you! Alfred Hannig Alfred.hannig@afi-global.org