Are you unbanked, underbanked, underserved or just plain left out? Shaw is marshalling a plan for you:
MINISTER OF Finance Audley Shaw urged ministries, departments and agencies engaged in the development of the National Financial Inclusion Strategy (NFIS) to commit to its execution to protect the financially vulnerable and underserved.
The NFIS is meant to create an enabling environment for Jamaicans to save, invest, do business and obtain relevant financial products and information, he said.
The strategy is the output of 15 ministries, departments and agencies as well as the private sector and non-governmental organisations, said Shaw at the launch of the NFIS, following the inaugural meeting of the National Financial Inclusion Council on Wednesday.
Establishment of a financial inclusion council to implement the Cabinet-approved umbrella financial inclusion strategy for the period 2016 to 2020 is a new structural programme under the International Monetary Fund standby agreement with Jamaica to be implemented by the end of March 2017.
The NFIS has four pillars – financial access and usage, financial resilience, financing for growth and responsible finance.
Shaw said the strategy has targets tied to each of the four pillars, which are to be achieved by 2020.
There are 53 action items under the NFIS, each of which a ministry, department or agency has been named as the primary entity charged with implementation.
The action items cover areas such as consumer protection and financial literacy; retail payments and financial infrastructure; housing finance; micro, small and medium-sized enterprise (MSME) finance, and agriculture finance.
Implementation of the strategy is to be overseen by the financial inclusion council, chaired by the Finance Minister.
Shaw said the council will foster a public-private partnership by engaging the private sector and nongovernmental organisations through a stakeholder advisory group, chaired by head of Jamaica National Group, Earl Jarrett.
Representatives of the business community, industry associations and nongovernmental organisations such as the National Consumers League will meet with the council on a semiannual basis to review the status of implementation of the action items and reports emanating from those evaluations will be made available to the public.
A financial inclusion steering committee, chaired by Bank of Jamaica Governor Brian Wynter, which developed the NFIS with assistance of the World Bank, will coordinate the implementation of the strategy through working groups.
Shaw said there are currently four working groups — retail payments and financial infrastructure, consumer protection and financial capability, housing finance, and MSME and agriculture finance — each chaired by executives of the Bank of Jamaica, Financial Services Commission, Development Bank of Jamaica and the National Housing Trust.
The minister said an annual report will be prepared by a technical secretariat, with an interim report to be submitted to the council at the halfway mark.
As to why Jamaica needs a financial inclusion strategy, Shaw said it was simply because “we need to protect those persons who are
financially vulnerable and underserved.”
Despite Jamaica’s positive economic performance in 2016, he said, “we remain a country divided on socioeconomic lines, with significant portions of our citizens and businesses struggling to obtain financial products that meet their needs.”
Noting that MSMEs continue to face restrictive credit conditions, the Minister said that while there was an expansion of commercial bank credit to the private sector by 14.8 per cent as at December 2016, there was a reduction in the allocation to small businesses, from 11 per cent the previous quarter to nine per cent.
The NFIS aims to grow the percentage of total private sector credit to MSMEs to 11 per cent, at minimum, by 2020.
The strategy for consumers calls for an increase in the number of adults making electronic payments from 33 per cent of the population to 50 per cent by 2020. A pilot programme is being developed to test electronic payment of PATH benefits to around 500 beneficiaries.
“All approved electronic retail payment service providers have been approached to demonstrate the functionalities of their products and we expect that the pilot will commence in April,” Shaw said.