What are the elements of a successful capacity building program with goals of financial inclusion? For many regions with large unbanked populations, financial inclusion efforts begin with banks and NGO’s trying small interventions, and then measuring effects. But with collaboration between public and private partners, peer learning, and regional initiatives being developed, some best-practices for capacity building have been identified.
Public and private stakeholders bring different perspectives. Governments bring regulatory structure, and NGO and development organisations provide experts in public policy development. Telecommunications and banking partners bring knowledge of infrastructure to the table. Educators can begin planning for financial literacy education in the schools and women’s clinics. A regional or national capacity building program for financial inclusion will be more likely to succeed when various stakeholders work together. When an underrepresented group is identified as needing financial inclusion, such as women, experts in women’s issues can boost the likelihood of success by identifying cultural issues affecting outcomes.
Many regions and nations have goals for financial inclusion, but are the goals coming out of regional data? Short and long-term goals for economic growth, poverty reduction, and reducing income inequality are general goals that could apply to any financial inclusion program across the world. But specific regional goals means there are systems in place to measure current inclusion, and specific goals that represent the current state of the population. Regional goals that are measurable and group-specific may provide a structure to efforts more targeted than general poverty reduction goals.
In developing specific, measurable goals, capacity building also includes assessment of initiatives, published so best practices can be shared, and standards for rigorous evaluation and reporting. Both goals and assessment of initiatives should be measurable, time limited, evaluated using understood evidence-based research methods, and targeted for the underrepresented groups that the initiatives are trying to impact.
Experts in financial policy initiatives can help identify the successful practices for implementing public policy, including regulatory issues and other nation-wide work that is needed for capacity building to succeed. Most regions and national governments have identified a national identification card system, for instance, as needed for long-term, successful financial inclusion efforts. This comes out of evidence-based research that shows lack of formal identity is highly correlated with financial inequality for women.
Financial infrastructure and payment ecosystems are also part of a capacity building program. Elements of fintech that can directly impact financial inclusion efforts include digital platforms that have interoperability between service providers. A financial infrastructure that includes a low-cost and low-risk first banking account may be a tiered process that encourages inclusion.
Developing a rigorous capacity building program for financial inclusion includes identifying stakeholders, assessing needs and developing goals, researching best practices, planning and implementing initiatives, and measuring and reporting on results.
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