About the WC-FINC
Created in 2015 as a working group under ASEAN Financial Integration, WC-FINC is tasked to deliberate policy actions and coordinate initiatives to enhance financial inclusion in region. The objectives, governance and reporting structure of WC-FINC are defined under its Terms of Reference (TOR). WC-FINC co-chairs report to the Senior Level Committee (SLC) and the ASEAN Finance Ministers and Central Bank Governors Meeting (AFMGM), via the ASEAN Finance and Central Bank Deputies Meeting (AFCDM).
The WC-FINC TOR, as well as the WC-FINC Financial Inclusion Framework, approved by SLC/AFCDM/AFMGM, defines the WC’s objectives, as follows:
Reduce the average financial exclusion level in ASEAN from 36.3% to 30%.
- Enhance readiness of financial inclusion infrastructure from 74.4% to 85%.
- Increase access and quality of financial services to all segments of society in AMS.
- Increase the level of financial literacy and consumer protection.
The average financial exclusion level of ASEAN Member States (AMS) is measured using data from the World Bank Findex,1 or based on the result of AMS national surveys, whichever is available. The readiness of financial inclusion infrastructure is based on a simple survey on whether financial infrastructure (e.g. credit bureaus, guarantee mechanisms, national IDs) necessary to achieve financial inclusion already exist in AMS.2 The other objectives are measured at the country level, but initiatives are regularly reported by WC-FINC members through a bi-annual survey.
To achieve the above objectives, the approved WC-FINC Strategic Action Plan (SAP) focuses on four Desired Outcomes (DO), each managed by sub-group of FINC members with an assigned lead:
DO1: Support national financial inclusion strategies
Lead: Bangko Sentral ng Pilipinas (BSP) and Autoriti Monetari Brunei Darussalam (AMBD)
DO2: Elevate capacity building of AMS to advance inclusive and sustainable growth
Lead: Bank Negara Malaysia (BNM)
DO3: Enhance digital financial inclusion; and
Lead: BSP and Bank Indonesia (BI)
DO4: Increase awareness on financial education and consumer protection.
Lead: Otoritas Jasa Keuangan (OJK)
Most initiatives are implemented with support from, or in coordination with development partners like the Alliance for Financial Inclusion (AFI), the World Bank (WB) and the United Nations Capital Development Fund (UNCDF).WC-FINC Chairmanship of BSP and AMBD
During the 5th Meeting of the WC-FINC in February 2018, the BSP and AMBD were designated as new co-chairs for two (2) years until its 9th Meeting in 2020. As Co-Chair of WC-FINC, BSP initiated the revision to the surveys of the WC-FINC to provide a more accurate picture of the financial inclusion in the ASEAN Region and capture more actionable information for the WC-FINC. The previous separate surveys were updated and consolidated into a single three-part survey covering: 1) Potential Macroeconomic and Financial Stability Risks and Opportunities in Implementing Financial Inclusion Strategies in the ASEAN Region; 2) Financial Inclusion Initiatives; and 3) Financial Inclusion Infrastructure. The set of enabling financial inclusion infrastructure of the survey was revised to reflect infrastructure/elements crucial for digital financial inclusion, such as national ID system, credit registry/bureau, movable assets collateral registry, warehouse receipt system, e-money, agent banking, and consumer protection regulations. The revised survey aims to facilitate a more focused monitoring of the financial inclusions risks, key initiatives, and outcomes of the AMS.Key accomplishments of the WC-FINC
As of its 7th meeting in February 2019, the WC-FINC reported and/or completed the following:
- Based on World Bank Findex data, there has been significant reduction in financial exclusion levels in ASEAN from 58% in 2011 down to 46% in 2017. The Findex data is collected once every three years. AMS national data, when available in the interim, shall be reported by WC-FINC.
- Based on latest national data of AMS, ASEAN exclusion level was reported at 36.3%.
- Based on WC-FINC survey, six (6) AMS already have their own Roadmaps or National Strategies for Financial Inclusion and three (3) have their Roadmaps or National Strategies for Financial Education. All ten (10) AMS already have a public credit registry or credit bureau while seven (7) have a credit guarantee institution.
- A total of 28 capacity-building programs on various financial inclusion topics were conducted in 2018.
- The following guidance notes/surveys have been completed:
- Guidance Notes on National Financial Inclusion Strategies
- Guidance Notes on Financial Education and Consumer Protection
- Guidance Notes on Digital Financial Services (DFS)
- Survey Report on Digital Financial Services in AMS (supported by World Bank).
The guidance notes serve as a reference for AMS in developing their own respective programs and policies on the covered topics. All guidance notes have already been published and can be shared to the public. The survey report on the other hand is for internal AMS use but a short version of the survey is currently being drafted for publication.
- An online portal dedicated for WC-FINC has been completed, and is being managed by DO4 Subgroup. This portal serves as repository of information and documents related to financial inclusion, financial education and consumer protection work in AMS. It also hosts the various guidance notes developed by WC-FINC.
Priorities for 2019
The following financial inclusion priorities of WC-FINC for 2019 were discussed during the 7th Meeting in Bangkok, Thailand:
- Sharing of progress of implementation of national financial inclusion strategies
- Development of guidance notes (GN) on monitoring financial inclusion toolkit. The GN aims to provide an outline of proposed steps in formulating a financial inclusion strategy and best practices in the region, for the guidance of ASEAN countries.
- Sharing of Malaysia of its experience on AML/CTF and imSME
- Sharing of country case studies on digital financial inclusion/digital financial services by AMS following presentations on Fintech (Singapore) and e-payments for financial inclusion (Thailand)
- Publication of the short version of World Bank’s Digital Finance Services Survey
- Publication of the GN on Digital Financial Services (DFS) and conduct of self-assessment on the adoption of DFS by AMS
- The WC-FINC co-chairs have enjoined DO4 to consider digital financial literacy as a priority in 2019 consistent with their report to the SLC on 18 October 2018
Development partners such as the World Bank, UNCDF, and AFI also provide support to the WC-FINC goals and initiatives. The World Bank provided support in finalizing the Survey Report on Digital Financial Services in AMS while UNCDF remains open to provide funding/technical assistance to AMS on various areas (e.g., geomaps of financial inclusion access points, MSME development, financial inclusion of women). AFI will deep-dive into selected AMS experiences through the AFI-ASEAN Fintech for Financial Inclusion Study wherein the Philippines, Cambodia, Malaysia and Thailand have been requested to participate, subject to country approvals and bilateral engagements with AFI.
1 Measured in terms of ownership of a formal account, including e-money. The opposite of this measure is considered by WC-FINC as the “exclusion” level.
2 Some AMS (e.g., Singapore) have indicated intent not to pursue establishment of some financial inclusion related infrastructures (e.g., law to support financial inclusion, financial inclusion monitoring framework, specific institution to support financial inclusion) due to unique country circumstances.