Created with initial funding from UKaid from the Department for International Development, FinMark Trust (FMT) is an independent trust whose business is controlled by five trustees from countries in Southern Africa. FMT’s purpose is ‘Making financial markets work for the poor, by promoting financial inclusion and regional financial integration’.
According to the World Bank, 2 billion adults are currently excluded from the global formal financial services sector. As financial inclusion is a key driver of sustainable societies, the availability of banking and payment services to the entire population without discrimination should be the prime objective of any financial inclusion policy. With 67% of people on the planet now having a mobile phone (considerably more than those who have a bank account) and an estimated 300 billion transactions valued at $860 billion being conducted, these statistics alone make mobile transactions a lead driver for change in payments technology – specifically the remittances and money transfer markets. Globally defined and accepted goals for financial inclusion include: Access to a full range of financial services at a reasonable cost for all households, including savings/deposit services, payment and transfer services, credit and insurance; sound and safe institutions governed by clear regulation and industry performance standards; financial and institutional sustainability; and competition to ensure choice and affordability for clients.
FinMark Trust is of the view that the continual and inclusive development of payments and e-commerce entails lowering barriers and increasing access for more people across geographies and incomes. This can only be achieved by involving financial service providers, financial regulators and policy-makers in promoting financial inclusion through increased adoption and use of appropriate financial offerings. In the SADC region, like many other regions, digital financial services will play a major role in this context. Refer to www.finmark.org.za for more information.
FinMark Trust further contends that financial inclusion will only significantly accelerate when key role-players take steps to test new commercial and regulatory models. Commercial banks, for example, have only slowly developed pathways to digital and other payments in poor and rural communities as they try to maintain control over all aspects of their distribution channels. In turn, in order for mobile network operators to facilitate the extension of their services to a broader range of financial services, their typically closed-loop approach will have to be amended to allow integration with other service providers and distribution agents. Lastly, policy-makers need to be assisted in the analysis of information, which motivates the redefining of regulatory models, to recognise the real impact of improved financial inclusion. The Financial Intelligence Centre Act Amendment Bill (FIC Amendments) is expected to have a significant impact on these related issues, especially from the specific perspective of financial institutions’ customer on-boarding processes.
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