An aerial view of Santo Domingo, capital of the Dominican Republic. (Photo: IFC)

Colombia has most inclusive economy; Dom Rep jumps 15 places

An aerial view of Santo Domingo, capital of the Dominican Republic. (Photo: IFC)

Colombia emerged as the most inclusive economy among 55 developing countries surveyed in the Economist Intelligence Unit’s Global Microscope 2019 report.

A joint survey with the Inter-American Development Bank, Bill and Melinda Gates Foundation and The Center for Financial Inclusion at Accion, the Global Microscope assesses how countries promote financial inclusion for both women and men across five categories, using 11 new gender-focused indicators.

According to the report’s ‘key findings’, “Latin America and the Caribbean remain the region with the most conducive regulatory environment and infrastructure for financial inclusion.”

“Countries continue to adopt financial inclusion strategies and incorporate digital approaches to inclusion,” it added.

Ranked first in the report, Colombia led in the categories “government and policy support” and “consumer protection”. The South American country was joint sixth in “infrastructure” and joint eighth in “consumer protection”

An aerial view of Bogota, Colombia.

Since 2014, the Government of Colombia has been implementing its National Financial Inclusion Strategy through an intern-institutional committee of key ministries that interact with the private sector.

“The strategy has primarily focused on increasing people’s access to the banking system and their use of financial products, and on enhancing financial literacy,” an overview of the country read.

What’s more, last year the country legislated fintech regulatory sandboxes as it incorporates digital transformation as a key feature of its financial inclusion strategy. This follows laws passed in 2018 that allow banks to become fintech.

Peru and Uruguay completed the top three.

Most improved goes to…

In the meantime, the Dominican Republic was the most improved country listed in the Global Microscope 2019, jumping 15 places to join Honduras, Kenya, and Thailand at 22.

Like Chile, Argentina and Jordan, the Dominican Republic has included financial literacy in its national curriculum. Through the Central Bank of the Dominican Republic (BCRD), the Government has implemented financial literacy programmes and a survey of financial culture.

The Central Bank of the Dominican Republic (Photo: News Beezer)

“In 2019 the BCRD launched a “virtual classroom” to expand knowledge of the country’s payments systems and other financial concepts. It also passed cyber-security regulations that apply to all financial institutions and has started to draft fintech regulations, empowering an internal team to collaborate with the private sector to promote digital payments,” a highlight of the Dominican Republic noted.

In other Caribbean countries

Trinidad and Tobago improved two places to finish at 32nd. However, Jamaica, ranked 48th, fell 12 placed. Haiti also climbed in the index, reaching 34.

In its overview of Trinidad and Tobago, the Global Microscope pointed out that the country’s “Strategic Plan for 2016-17 to 2020-21 is the main policy document for financial inclusion”. It states further that the Central Bank of Trinidad and Tobago has the responsibility of leading policy implementation and coordination.

The Central Bank of Trinidad and Tobago in Port of Spain.

“The country continues to lack a comprehensive regulatory framework for agent banking, remote account opening, microcredit and inclusive insurance,” the overview continues.

Trinidad and Tobago also lacks sufficient technical expertise to regulate emerging services.

Notwithstanding, the country has implemented financial literacy and digital literacy programmes designed to increase financial inclusion.

In the meantime, Jamaica joined Colombia, India, and Uruguay as countries which scored perfectly in the area of digital financial inclusion. The criteria used to asses countries are: e-money issuance by non-banks, use of agents, risk-based customer due diligence, and consumer protection.

“Jamaica’s Financial Inclusion Strategy of 2016-20 made financial inclusion a priority through the creation of the National Financial Inclusion Council, in collaboration with various public- and private-sector actors,” the island’s overview stated.

“The Government has implemented a regulatory sandbox framework to support the financial technology payment system, enabling the development of financial technology that can help to extend access to financial services to low- and middle-income populations,” it continued.

Prime Minister of Jamaica Andrew Holness speaking in the Lower House of Parliament in Kingston, Jamaica. (File photo)

Despite the tabling of bills to address data security and microcredit, the Global Microscope 2019 said that only if the Jamaican Parliament passes these laws will Jamaica improve in its ranking.

There are also ongoing developments in fintech, with the central bank supporting the regulatory sandbox framework, the report said.

Neither last nor least

Haiti barely missed the bottom five countries, after improving three places.

Similar to men in Cameroon, Egypt, Pakistan, and Tunisia, Haitian men continue to enjoy more access to national ID, the Internet and mobile phones when compared to women.

In Latin America and the Caribbean, women in Guatemala, Colombia, El Salvador and Panama suffer this disadvantage.

In 2015, Haiti Haiti approved a national inclusion document — the Projet de Stratégie Nationale d’Inclusion Financière —detailing short-, medium- and long-term implementation plans in conjunction with financial institutions, the private sector, government and civil society.

View of a shanty town in Port-au-Prince, Haiti. (Photo: Blockchain Land)

Just last year, the central bank hosted a fintech seminar highlighting the important role digital financial services will play in deepening financial inclusion in the country. Also, with the help of the USAID the Banque de la République d’Haiti (BRH) published the FinScope Consumer Survey.

“Nearly all countries have created a financial literacy strategy, and most are implementing activities to educate consumers. However, few focus on building financial capabilities,” the Global Microscope 2019 also found.

“Men and women have similar legal requirements to open accounts in all but one of the countries in the 2019 Microscope, but few governments actively collect data on women’s financial inclusion or include specific actions targeting women in national strategies,” it added