MFW4A Conference on Financial Capability

Sep 29, 2009

A step towards financial inclusion in Africa

Accra, Ghana,
9 September 2009 — More than 200 policy makers, regulators, journalists as well as representatives from financial institutions and their apex organizations, the education sector, consumer protection agencies, and development partners from over 30 countries
met in Accra
at the conference “PROMOTING FINANCIAL CAPABILITY AND CONSUMER PROTECTION - A STEP FORWARD TOWARDS FINANCIAL INCLUSION IN AFRICA”.
“Promoting financial capability is about raising awareness, promoting knowledge, building trust, and changing behavior”, says Dr. Kwabena Duffuor, Honourable Minister of Finance and Economic Planning of Ghana, who hosted the event together with the Partnership for Making Finance Work for Africa (MFW4A). “And it is not limited to educating consumers and enabling them to take informed decisions saving, loan and investment products. Additionally, management and staff of financial institutions need to be trained to become more responsive to the needs of their clients, and supervisors need the capacity to protect the consumers against fraud and other bad business practices.”
Low-income households in Africa often have limited access to demand-oriented and affordable financial services such as savings, loans, and insurance, which means that they have to revert to more expensive and less secure traditional alternatives of saving and borrowing and remain vulnerable to adverse shocks. Research has shown that in order to strengthen financial inclusion in Africa, there is a need to promote financial capability, i.e. to empower people to be capable of managing their financial assets and liabilities and to better understand their rights and responsibilities vis-à-vis financial institutions. However, strengthening financial capability of the population is not sufficient since governments also have a role to play in protecting consumers by ensuring that financial institutions apply recognized standards and suitable codes of conducts. In order to create sustainable ‘win-win situations’ in the long-run, financial capability measures need to go hand in hand with responsible, transparent and reliable services provided by financial institutions.
German Development Cooperation, the World Bank, DFID and USAID – the 4 main sponsors of the event - see financial capability and consumer protection as critical to their financial sector agenda and are increasing their support in this area, including outreach and knowledge sharing events such as this conference.
At the Conference, the perspectives of policy makers, regulators, consumer protection agencies, financial institutions, and clients werediscussed by practitioners from Africa, Asia, the United States and Europe. In moderated regional and national working groups, participants developed ideas and proposals for improving financial capability in their respective countries and regions. A panel on social marketing showed films and discussed the variety of marketing channels that can be used best to address the different target groups of financial capability campaigns. The DFID-funded Financial Education Fund, a challenge fund supporting innovative projects in Africa that improve financial capability, launched its second round at the Conference.
The event was preceded by a day-long meeting on "Financial Capability and Consumer Protection in Ghana",
jointly held by
The Government of Ghana and the Ghana Microfinance Institutions Network (GHAMFIN).
“Financial capability is very high on the political agenda of the Government of Ghana”, sayd Seth Terkper, Honourable Deputy Minister of Finance and Economic Development. He added that “Ghana is one of the first countries in Africa that has developed and started to implement a National Strategy for Financial Literacy and Consumer Protection in the Microfinance Sector”. Both events, the Making Finance Work for Africa Conference and the Ghana Pre-Conference, challenged participating Government officials, civil society, media representatives, development partners and the private sector to engage in strengthening and empowering consumers in the financial sector and thus increase their access to safe and sound financial services.