Leadership Program for Financial Inclusion

THE FLETCHER SCHOOL

Leadership Program for Financial Inclusion

Policy Memoranda 2019

THE FLETCHER SCHOOL

Leadership Program for Financial Inclusion

Policy Memoranda 2019

Foreword

The policy memos contained herein are the capstone achievements of the 8th fellowship class of the Fletcher Leadership Program for Financial Inclusion (FLFPI). We are proud of the great work this fellowship class has completed in order to now join our community of over one hundred FLPFI alumni.

The 2019 fellows hail from Latin America, sub-Saharan Africa, Asia and the Middle East, and are all public servants working for Central Banks, Ministries of Finance, Communications Authorities, or other institutions that design and implement policies affecting financial inclusion. This year, our fellows grappled with important and diverse financial inclusion challenges, including expanding the access infrastructure for social transfer recipients in Argentina, improving financial health for low-income Tanzanians and Kenyans, improving the financial inclusion of rural women in Egypt, simplifying Know Your Customer (KYC) requirements in Zambia, improving access to affordable financing for microenterprises in Costa Rica, and addressing cybercrime's toll on financial inclusion in South Africa.

The policy memos in this publication are the culmination of the FLPFI fellowship, an intensive 9-month executive certificate program designed to help individual policymakers increase the likelihood that their financial inclusion policy initiatives will be well-designed and implemented. The fellowship creates a space where even the most expert policymaker is encouraged to ask questions and be curious, and, above all, to stay mindful of the potential client, think critically, and look for evidence to guide decision-making at every step of the policy process.

At the heart of the fellowship is the Eight Question Method for Policy Development (8QM)-- an adaptive framework that guides fellows sequentially through critical steps related to problem identification, solutions development, policy formulation and selection, negotiation, persuasion, implementation, and monitoring and evaluation. Each problem and policy solution must be substantiated with evidence and focused on the needs of the target population. Policy options are weighed against key criteria such institutional priorities and capacities, existing evidence and gaps in the policy landscape.

Our fellows quickly become experts at using the 8QM to analyze and design policy. Take, for example, Ibrahim Umar Hassan from the Central Bank of Nigeria. Ibrahim focused on addressing the increasing number of complaints filed by retail loan customers about excess charges and unauthorized fees. He analyzed the causes of the problem and found evidence that retail loan products are being marketed without full disclosure. Ibrahim weighed several possible solutions before working to develop a policy tool that helps to increase customers' understanding of the terms and conditions of retail loan products. Ibrahim's policy recommendation considers evidence of the problem and potential solutions, the stakeholders involved, and the feasibility of implementing the policy tool.

Each fellow is proposing a policy that is novel in their context. This necessarily implies that iterative learning and adjustment will be needed to optimize the policy. For example, the fellows from Zimbabwe, Pakistan and Cameroon are working to expand access to and usage of agricultural credit, and similarly, the fellows from Haiti, Kosovo, Bangladesh, Malawi, Nigeria, Ethiopia, and Indonesia are each trying to increase the usage of digital financial services for a particular underserved population. Yet based on careful analysis of their unique context, each fellow has designed a different policy tool. As their policies roll out, the fellows continue to learn from each other and others working in these spaces to adjust course and offer complementary policies. In many cases, there are few analogous contexts from which fellows can draw relevant lessons; they are at the vanguard and are prepared to learn and share lessons as they go.

The Fletcher School, Tufts University

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The best evidence of a policy's efficacy comes from the results of trial, error, and commitment by policymakers to continuous improvement. Our fellows inspire us with their unrelenting passion to improve financial inclusion in their countries. We admire their ability to critically evaluate problems and creatively develop solutions. We hope that the skills, knowledge, and community gained through their fellowship may serve them well in these endeavors for years to come. Jenny Aker

Director, Fletcher Leadership Program for Financial Inclusion Professor of Development Economics, The Fletcher School

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POLICY MEMORANDA 2019

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