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AFRACA Sub-regional Workshop on Rural Financial intermediation

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AFRACA Sub-regional Workshop on Rural Financial intermediation Powered By Docstoc
					SUB-REGIONAL WORKSHOP ON RURAL
FINANCIAL INTERMEDIATION FOR GROWTH
AND WEALTH CREATION IN AFRICA




Conclusions and Recommendations
             Andrew Obara
          FRIENDS Consult Ltd
    CONCLUSIONS

 SO FAR, THERE ARE SOME ATTEMPTS AT THE
  INSTITUTIONAL LEVELS TO DELIVER INCLUSIVE
  FINANCIAL INTERMEDIATION – BUT IN GENERAL,
  THE DEPTH OF OUTREACH IS STILL VERY LOW
 So… The public and private sectors should
  play their respective roles in a more focused
  and consistent way
      CONTEXT
 AFRACA promotes responsive banking for low
  income/ rural people
 Workshop objective: To share experiences and
  sound practices in rural finance so as to improve
  product offerings
 Workshop conclusions will, alongside those of
  other similar workshops elsewhere, be presented
  in a consolidation workshop in Kinshasha Oct 2010
 Results of that workshop will be published by
    CONCLUSIONS

 AT THE MACRO LEVEL, WE NEED CONDUCIVE
  DEVELOPMENT POLICIES, LAWS AND PRACTICES
  AIMED AT DEVELOPMENT RATHER THAN NARROW
  POLITICAL GAINS
 So… Engage governments to implement
  rural development programmes with
  consistency
      CONCLUSIONS

 AT THE MESO LEVEL, WE NEED EFFECTIVE
    COUNTRY NETWORKS, CONDUCIVE REGULATION/
    SUPERVISION AND EFFECTIVE PRIVATE/ PUBLIC
    COOPERATION
 So… 1) Strengthen the rural finance network
  organization 2) Engage regulators to
  champion conducive legislation and
    regulation 3) As a subsector, collaborate
    with government

    CONCLUSIONS

 RISKS ARE COMMON IN ALL INVESTMENTS AND
  LEDNING, BUT CAN BE MITIGATED IF WE HAVE A
  CLEAR PURPOSE, APPROPRIATE SYSTEMS AND
  FULL UNDERSTANDING OF THESE RISKS
 So… Invest in the knowledge and skills
  pertinent to agricultural lending the related
  risks before introducing or reviewing
  agricultural lending
    CONCLUSIONS

 WHERE FINANCIAL INSTITUTIONS HAVE MADE
  EFFORTS AT FUNDAMENTAL INNOVATION,
  SUSTAINABLE AGRICULTURAL FINANCE HAS
  WORKED; ALL COSMETIC ATTEMTS OR THOSE
  MAIMED BY UNCODUCIVE PUBLIC POLICY HAVE
  FAILED
 So… Engage in REAL product innovation
  and development for specific agricultural
  enterprise types,
      CONCLUSIONS

 REDUCING ECONOMIC VULNERABILITY OF POOR
  HOUSEHOLDS, INTEGRATION OF RISK MANAGEMENT
  INTO OPERATIONS AND ASSISTANCE IN MARKET
  ACCESS ARE NECESSARY FOR AG FINANCE TO SUCCEED
 So… Help the rural small scale farmers to
  reduce their typical vulnerabilities for better
  integration
    CONCLUSIONS

 INSURANCE CAN IN SOME CASES BE USED TO
  HEDGE RISKS OF LENDING TO AGRICULTURE – BUT
  WHAT IS THE COST?
 EFFECTIVE RISK DETECTION AND CONTROL
  PROCEDURES ARE NECESSARY IN OUR
  ORGANIZATION
 So… Insure what you can, but establish a
  suitable framework and procedures to
  manage your institutional risks effectively
    CONCLUSIONS

 CONSUMER EDUCATION AND PROTECTION IS A
 WORTHWHILE INVESTMENT FOR MARKET
 VIABILITY; IMPLEMENTING A WELL DESIGNED
 SYSTEM FOR THIS CAN BE A BIG BOOST TO POOR
 CONSUMERS OF FINANCIAL SERVICES, ALTHOUGH
 THERE ARE CHALLENGES TO OVERCOME.
 So… The network organizations and
 national associations should consider
 introducing effective consumer education.
    CONCLUSIONS

 REGULATION’S PRIMARY AIM IS NOT INCLUSION.
  REGULATORS SHOULD SEEK PRACTICAL
  INNOVATIONS TO OFFER PRO-POOR FINANCIAL
  REGULATION WHILE MAINTAINING THE SYSTEMIC
  INTEGRITY OF THE FINANCIAL SECTOR.
 So… Encourage the lower tier financial
  institution to graduate into regulated
  entities while watching but not regulating
  the rest of the (smaller Fis).
    CONCLUSIONS

 FINANCIAL APEXES ARE MORE EFFECTIVE IF THEY
  ALSO SUPPORT SOME CAPACITY BUILDING,
  ESPECIALLY TRAINING. BUT EXTREMELY
  DIFFERENT SERVICES LIKE GOSPEL PREACHING
  SHOULD
 So… Streamline your interventions and
  work complementarily with other networks
    CONCLUSIONS

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posted:9/9/2011
language:English
pages:19