This year’s review traces the overall progress made by FinMark Trust in the implementation of its programme to “make financial markets work for the poor”. As a reminder to our readers, our 2015-2020 strategy is anchored on (i) regional financial integration (ii) financial inclusion and (iii) global thought leadership. Under each of these pillars we run different programmes and projects which are national, cross-country and regional in nature. As I have said in my previous reviews, working in such diverse geographies is a challenging but rewarding task which would not have been possible without a comprehensive understanding of how the financial markets operate in these spaces. No doubt, catalytic interventions that are coordinated and responsive to the market are most likely to result in increases in access to financial services.
Looking at the level of financial inclusion within and across the countries for which FinScope data is available, there is no doubt that significant progress has been made in terms of access to financial services by the poor segment of the population. It is estimated that 66% of adults in the region are financially included representing some 83.5 million individuals. Although this is encouraging, the overall figure of financial exclusion remains unacceptably high with some 41.9 million adults still excluded from mainstream economic activities. They are vulnerable to shocks and rely on the expensive informal credit providers to meet their financial needs. It is therefore important that, as development is pursued, a fully inclusive economic environment is created for the benefit of each and every individual including small businesses. This requires the participation and commitment of state and non-state actors as well as financial services providers and other role players. The financial inclusion Indaba organised jointly by FinMark Trust, SADC Secretariat, National Treasury of South Africa and the SADC Bankers Association in July 2015 provided an excellent platform for a meeting of minds on how to roll out an inclusive approach for pro-poor development in the SADC region.
Following the Indaba, the SADC Council of Ministers requested each SADC country to undertake FinScope surveys every two years with the assistance of FinMark Trust. No doubt, it would be ideal to have self-financing FinScope surveys to track progress at regular intervals within the entire SADC region as in the case of South Africa where the survey is undertaken on an annual basis. The data collected is useful to policy-makers and regulators to inform the decision-making process for policy and regulatory reforms as well as for financial service providers to design new products and offer services that promote and enhance financial inclusion. Our experience, however, shows that these reforms and changes take time especially when there is lack of capacity to engage with and analyse the data. Therefore, it would be important for SADC to build the required capacity to analyse the data that these surveys generate. Institutions like FinMark Trust can play a catalytic role in the building of such capacity in the SADC region and beyond.