NFIS Development Process Helen Gradstein Financial Sector Specialist Finance, Competitiveness & Innovation Global Practice World Bank Group Agenda 1. Overview of NFIS Development Process 2. Identifying and Engaging NFIS Stakeholders 3. Developing an NFIS Drafting Model and NFIS Development Roadmap 4. Conducting Data and Diagnostic Work 1. Overview of NFIS Development Process Overview of NFIS Development Process • Identification of a strong lead stakeholder or “NFIS champion” Identifying • Organizing stakeholders into three broad and Engaging groups: (i) lead stakeholder(s), (ii) drafting Stakeholders stakeholders, and (iii) consultation stakeholders • A drafting model: identifies stakeholders will contribute to the NFIS development process Developing an NFIS Drafting Ready • Drafting model: Inform the NFIS development road map i.e. a sequence of steps and related Model and NFIS Development for NFIS actions when developing and launching an NFIS Roadmap Drafting • Assessing the current state of financial inclusion and identifying obstacles and Conducting opportunities to meet policy objectives Data and through data, diagnostics, and mapping Diagnostic exercises Work 4 2. Identifying and Engaging NFIS Stakeholders Identifying and Engaging NFIS Stakeholders ➢ Identifying and segmenting the universe of relevant financial inclusion stakeholders ➢ Defining a lead stakeholder or “NFIS champion” is critical 6 Identifying and Engaging NFIS Stakeholders: Poll What type of institutions should be involved in the NFIS development process? Mark all that apply • Only the leading institution • A select few public sector institutions • Public and private sector institutions related to the financial sector • A range of both public and private sector institutions (including beyond the financial sector) 7 Identifying and Engaging NFIS Stakeholders Securing Initial High-Level Buy-in for NFIS Engaging the Private Sector • Securing initial high-level • Private sector stakeholders buy-in for the development of should play a significant role in an NFIS providing inputs into the NFIS • Developing a higher-level • Private sector players (such as NFIS Development is a industry associations, major Tips to Engage common practice NFIS financial service providers, Stakeholders fintech companies, mobile • In general, securing high- network operators, etc.) will level buy-in for the NFIS gather different viewpoints and development process early understand bottlenecks to on and also planning ahead financial inclusion from a for how the NFIS will provider’s perspective ultimately be approved 8 Identifying and Engaging NFIS Stakeholders 9 3. Developing an NFIS Drafting Model and NFIS Development Roadmap NFIS Drafting Model • An NFIS drafting model identifies how each stakeholder will contribute to the NFIS development process 1-on-1 stakeholder consultations Drafting How to engage committee stakeholders Consultation Drafting workshops retreats during NFIS development? Solicitation Working groups of written inputs or comments 11 Developing an NFIS Drafting Model: Poll What other drafting model strategies can you think of to actively engage a range of stakeholders? Type your response over the phone or online, all ideas are welcome! 12 NFIS Development Roadmap An NFIS development road map can outline and structure the NFIS development process and keep it on track: 13 Areas for Stakeholder Input NFIS Vision and Definition of Financial Baseline Assessment Inclusion • Identify obstacles and opportunities for financial inclusion (legal, infrastructural, etc.). • Describe institution’s main achievements to Policy Objectives and Policy Areas date (including impact) Actions Monitoring and Evaluation • Propose concrete actions based on identified obstacles and opportunities and linked to broader NFIS objectives and policy areas • Propose key indicators and sources of data available in stakeholder’s own institution 14 4. Conducting Data Collection and Diagnostic Work Conducting Data Collection and Diagnostic Work Data Thematic or subsector diagnostics Mapping or stocktaking 16 Conducting Data Collection and Diagnostic Work ➢ Supply-Side Data ➢ Demand-Side Data Data ➢ Enabling Environment Data ➢ Program Data Thematic or subsector diagnostics Mapping or stocktaking 17 Conducting Data Collection and Diagnostic Work Demand & Supply Side Data: Understanding your data sources Conducting Data Collection and Diagnostic Work ➢ Supply-Side Data ➢ Demand-Side Data Data ➢ Enabling Environment Data ➢ Program Data ➢ FSAP ➢ Agricultural finance Thematic or ➢ Financial consumer ➢ Credit infrastructure subsector protection ➢ Islamic finance ➢ Digital payments ➢ Documentation barriers diagnostics ➢ Insurance Mapping or stocktaking 19 Conducting Data Collection and Diagnostic Work Pakistan’s NFIS was developed through an extensive consultative process, gap analysis, and prioritization of areas of focus, including WB Technical Notes: 1. Digital Transactional Accounts – digitization; more access points to achieve scale / viability 2. MSME Finance – enabling policy and legal environment for product diversification 3. Agricultural Finance – enabling legal framework, and capacity of FIs and farmers 4. Islamic Finance – capacity building and policy / regulations to further diversify sector and products 5. Housing Finance – housing policy; property registration reforms; market development 6. Payments Systems – digitization; payments infrastructure; interoperability; remittances 7. Secured Transactions – legal framework and market/credit infrastructure 8. Insurance – supervision and capacity of sector for outreach and market development 9. Pensions – expand pensions to more workers and digitize payments 10. Consumer Protection and Financial Literacy – widespread awareness, investor education and standards Conducting Data Collection and Diagnostic Work ➢ Supply-Side Data ➢ Demand-Side Data Data ➢ Enabling Environment Data ➢ Program Data ➢ FSAP ➢ Agricultural finance Thematic or ➢ Financial consumer ➢ Credit infrastructure subsector protection ➢ Islamic finance ➢ Digital payments ➢ Documentation barriers diagnostics ➢ Insurance ➢ Key stakeholders Mapping or ➢ Programs or initiatives relevant to financial inclusion stocktaking 21 Thank you! Questions?