ABSTRACTThe National Financial Inclusion Strategy is a comprehensive public document that presents a strategy developed at the national level to systematically accelerate to level of financial inclusion. It aims at reaching the people who are at the least places. It is defined as, “a state wherein there is effective access to a wide range of financial products and services by all.
” Financial is important for every household and business as access to basic financial services such as savings, payments, credit and investments make a substantially positive difference in people’s lives. In the following article, the role of World Bank in national financial inclusion strategy is explained.KEY WORDS: National financial inclusion, strategiesINTRODUCTIONNational Financial Inclusion Strategies (NFIS) can be defined as roadmaps of actions, agreed and defined at the national or sub national level, which stakeholders follow to achieve financial inclusion objectives. Successful strategies coordinate efforts with the main stakeholders, define responsibilities among them, and state a clear planning of resources by, for example, prioritizing targets. A strategy can promote a more effective and efficient process to achieve significant improvements in financial inclusion.
Engagement with the private sector, including through structured consultation, can help ensure the success of the strategy and the relevance of the goals set.More than 50 countries have made headline financial inclusion commitments as of the end of 2014. Many of them are developing National Financial Inclusion Strategies to ensure that resources and actions are put in place to achieve those commitments.NFIS provide an important opportunity to introduce an evidence-based, prioritized, better resourced, and more comprehensive approach to expanding access and usage of financial services. NFIS can harness the enabling foundations and drivers identified as critical to achieve Universal Financial Access, and also build on those measures to promote the uptake and use of a broad range of financial services.REVIEW OF LITERATUREMartin Cihak and Parabal Singh (2013), have given detailed information on countries which adopts the strategies and on the similar features on financial inclusion strategies. They say that it improves financial literacy, modifies the regulatory framework to enhance financial access, collects data and measurements and expands the mobile financial services.
Andrew D.Tan (2015), says that financial inclusion is very much important for the country, as it focuses on building the opportunity for the most backward group. It is an inclusive of financial system which not only pro-growth but also pro-poor with the potential to decrease income inequality and poverty.Dr.Nimal A.Fernando and Robin Newnham, have highlighted the various strategies that various countries have adopted. They give a total view of te countries strategies towards financial inclusion.
ACTION PLAN – WORLD BANKThe World Bank Group is working with more than 20 countries to support the design or implementation of National Financial Inclusion Strategies or Action Plans.The effective design and execution of a National Financial Inclusion Strategy or Action Plan rests on six main building blocks:? Data and Diagnostics: The content and priorities of the NFIS are informed by data and diagnostics, covering both demand and supply side. The World Bank Group (WBG) can support countries to generate data and produce diagnostics to inform policy development and sequencing.? Targets and Objectives: On the basis of available financial inclusion data, concrete, measurable, and verifiable targets can be set, against which regulators can monitor progress. The WBG can assist countries in identifying available and relevant indicators on which to base the target-setting exercise.? Leadership and Coordination: Internal coordination efforts are needed both during the formulation and implementation of the NFIS. These efforts can be crystallized through the establishment of a governance structure, with a clear mandate and dedicated resources.
The WBG can support countries in conducting consultations, and identifying the appropriate coordination mechanism to establish.? Strategy Formulation: Drafting of the NFIS can be done on a consultative basis, to secure buy-in across government and the private sector. The WBG can provide technical drafting inputs, drawing on global and country experts, and its depth of knowledge across a range of financial sector priority areas.? Strategy Implementation: The actions and reforms set out in the strategy benefit from clear prioritization and sequencing, with clarity also on the roles and responsibilities for each implementing institution. The WBG is well placed to provide technical assistance to countries to sequence and implement priority actions, ranging from policy and regulatory reforms to more direct interventions.
? Monitoring and Evaluation: M is essential to ensure that the implementation of the strategy is on track and to adjust policies and other measures in real time. The WBG can support countries in designing an adequate M framework and provide capacity building to relevant authorities in charge of its application. GOING FORWARDThe Financial Inclusion Strategies Database underscores the scope for further improvements in the design of the national financial inclusion strategies. While it is too early to evaluate the impact of the national strategies, the database is a useful tool for comparing strategies across different countries, and it should make subsequent analyses easier.