National Financial Inclusion Strategy 2022-2030

1. All Fijians have convenient and timely access to affordable products and services offered by the formal financial sector.

2. All Fijians use a range of financial products and services to meet lifecycle needs and build financial resilience.

3. All Fijians have sufficient financial education and access to clear, transparent information that equips them to make informed financial decisions.

4. All Fijians receive high quality customer service from the financial sector and their interests are adequately protected. ii FIJI National Financial Inclusion Strategy 2022-2030 “We recognise and appreciate that this is an ambitious plan but we are confident that it is not an impossible one...the third NFIS is neither the Reserve Bank’s nor the financial sector’s plan alone; it is OUR plan and OUR Strategy for the next 9 years. It requires the full support of all stakeholders and partners, innovation and a ‘CAN DO’ attitude by all of us.” Ariff Ali Governor of Reserve Bank of Fiji i FOREWORD all our stakeholders in the financial sector and our partners who have journeyed with us over the decade and contributed towards our financial inclusion progress and achievements. The first NFIS in 2010 focused on improving access to formal financial services and much of this emphasis continued in the second NFIS. According to the Demand Side Survey (DSS) 2020 we had made Governor of Reserve Bank of Fiji great strides in this area with bank Ariff Ali account ownership increasing from 60 percent to 78 percent and formal This is the third National Financial financial account ownership rising Inclusion Strategy (NFIS) for Fiji, to 81 percent from 64 percent. The building on the progress made from positive outturn was underpinned by the previous two 5-year strategic a number of initiatives such as the plans implemented from 2010. As introduction of financial education Governor and Chairman of the in schools; ongoing financial literacy National Financial Inclusion Taskforce campaigns and awareness sessions; (NFIT), I am personally honoured to Government transition from cheque be leading the Reserve Bank’s efforts payments to direct bank account and achievements in the financial deposits for social welfare benefits; inclusion space, something that student loan scholarship payments; has not been the core mandate for lease payments to individual central banks but is rapidly gaining landowners; and pension payments. traction. I have experienced first- Other significant achievements hand the benefits of being financially included the narrowing of the gender included and I also know from both gap by 9 percentage points; rollout of personal experience and from my affordable insurance products such observations when travelling around as the bundled insurance product Fiji and meeting people from all walks which increased insurance uptake from of life what it means to be excluded 12 percent in 2015 to 37 percent in with no access to financial products, 2020; the improved uptake of mobile services or information that can make money from 2 percent to 27 percent life a little easier. On the other hand, supported through an increase in I am pleased to note the progress and inward mobile money remittances and milestone achievements in our financial expansion of the mobile money retail inclusion journey, which are testament ecosystem; and an enhanced collection to the partnership and passion of financial inclusion data at the demonstrated by stakeholders. I take disaggregated level which will aid us in this opportunity to sincerely thank measuring financial inclusion progress ii and provide useful input for evidence- accounts and higher transaction based policy development. volumes, but into meaningful impact in the everyday lives of those we serve. As we stand at the commencement of a new Strategy, we acknowledge The new NFIS 2022-2030 framework that the years 2020 and 2021 have targets four thematic areas of been some of the most difficult and development: challenging for everyone. We have I. Inclusive Finance – Access had to adapt to a radically changing to formal financial services is environment – demonstrating both essential to enhancing the ability our vulnerability and resilience as a of individuals and households to country. Navigating the COVID-19 manage their lives and build their environment presented us with the future. Including them in the formal rare opportunity to embrace, reform economy is a critical contribution and recover sustainably and with to poverty reduction, tackling greater resilience. In its own ways, the inequality, and fostering inclusive pandemic accelerated the progress growth. This pillar will focus on of our digital and mobile money ensuring that Fijians, especially platforms and prompted many of us the most vulnerable and financially to relook at and revamp our processes excluded, are able to access and towards a new normal of doing effectively use a range of products business. and services that are affordable Our third NFIS will run from 2022 to and designed to suit their needs.

20301. The realignment of our usual This pillar also includes the 5-year NFIS to a longer term plan and development of specific financial towards achievement of the United products to combat and build Nations (UN) Sustainable Development resilience to climate change and Goals (SDGs) by 2030 signals a shift economic shocks; in how we will approach financial II. Digital Financial Services (DFS) inclusion in Fiji going forward. In the – DFS is a key catalyst that new NFIS, our focus will be on the promotes financial inclusion by people who need the most help. In this overcoming barriers to formal regard, the center of our initiatives financial service access and usage are women, rural communities, by our underserved target groups. youths, people living with disabilities The recent COVID-19 experience (PWDs) and micro, small and medium has taught us that using the enterprises (MSMEs). What this means digital platform can work and is that we will transition from the is safe and more efficient. This previous “access centered” plans that pillar will build on this momentum defined our financial inclusion efforts through embracing innovation to up to 2020 to a strategy focused on enable higher rates of both access increasing “usage” by emphasising and usage of impactful financial customer-centric policy initiatives that services; meet the needs of the most vulnerable population and addresses the III. MSME Finance – I firmly believe persistent gaps and inequalities for that MSMEs are engines of inclusive both individuals as well as MSMEs. We growth as they create employment, believe this will ensure that financial stimulate economic activity, inclusion translates not only into more contribute to better standards of

1. Review of the NFIS 2016-2020 was undertaken in 2021. iii living and a reduce poverty. Access so much more different from the to finance remains a key constraint younger days of my generation. for many smaller Fijian businesses We need our Fijian children to and is a barrier to recognising their start learning good saving habits full potential. This pillar focuses early in life and understand the on providing alternative financing value of money sooner so they can options for MSMEs, in particular contribute to a more financially women, youth and PWDs. With a responsible Fijian economy in the vast and fast evolving array of risks future. and challenges in the sector, having We recognise and appreciate that tailored and affordable financial this is an ambitious plan but we are solutions is critical for MSMEs to confident that it is not an impossible survive and continue operating one. Similar to the previous strategic sustainably; and plans, the third NFIS is neither the IV. Consumer Protection and Reserve Bank’s nor the financial Financial Capability – financial sector’s plan alone; it is OUR plan inclusion is also about social and OUR Strategy for the next 9 responsibility of market players and years. It requires the full support of all providers. Important prerequisites stakeholders and partners, innovation for the safe use of financial and a ‘CAN DO’ attitude by all of us. products are transparency, I have no doubt whatsoever that we financial consumer protection will achieve the objectives set out mechanisms and financial literacy. within this new ‘Strategy’ because I It is impossible for Fijians to benefit have confidence in the passion and from the full potential of financial commitment of our partners and services if they are not financially stakeholders. The Reserve Bank will literate. This pillar will look into the do all it can to facilitate development implementation of a robust market and innovation towards meeting our conduct framework, increase our financial inclusion goals so that come financial literacy efforts, leverage 2030, we will see further progress digital platform and re-examine the made translated into improved financial education programme in livelihoods for ordinary Fijians. schools. Our goal is to financially prepare our young people for life in the real world which is full of new challenges, is rapidly evolving and Ariff Ali Governor, Chairman National Financial Inclusion Taskforce iv ACKNOWLEDGEMENT The Reserve Bank of Fiji wishes to acknowledge all its stakeholders including financial services providers (FSPs), government agencies, civil society organisations (CSOs) and the private sector who have contributed to the development of Fiji’s NFIS 2022-2030. We also recognise the technical guidance offered by FinValue Advisors Private Limited and funding support from AFI. A special appreciation is also extended to our development partners, the United Nations Capital Development Fund (UNCDF), United Nations Economic and Social Commission for Asia and the Pacific, International Finance Corporation, World Banking Group, Asian Development Bank and support from fellow peers from the AFI network including Bank of Ghana, Reserve Bank of Malawi, Ministry of Finance Zambia, Reserve Bank of Zimbabwe and AFI’s Gender Specialist. The NFIS is a result of an extensive collaborative process that involved significant stakeholder reflection and consultation which is closely aligned with the World Bank’s toolkit for developing and operationalising a NFIS and the AFI policy model for NFIS. The RBF calls on all stakeholders to provide the strong footing needed to successfully implement the new NFIS, with your continuous partnership, collaboration and passion. v CONTENTS LIST OF ACRONYMS 1 COORDINATION STRUCTURE 21 EXECUTIVE SUMMARY 2 National Financial INTRODUCTION 4 Inclusion Taskforce 22 CURRENT STATE OF FINANCIAL Working Groups 22 INCLUSION 5 Secretariat 22 Financial Sector Landscape 5 STAKEHOLDERS 23 State of Financial Inclusion Stakeholder Roles and in Fiji 5 Responsibilities 22 Financial Sector of Fiji 5 MONITORING & EVALUATION 24 Underserved Segments: RESULTS FRAMEWORK 26 Women, Youth, Rural Communities, MSMEs IMPLEMENTATION PLAN 28 and PWDs 6 Priority Pillar I – Inclusive Finance 8 Inclusive Finance 28 Digital Financial Services 9 Priority Pillar II – MSME Finance 11 Digital Financial Services 31 Financial Literacy and Priority Pillar III – Consumer Protection 13 MSME Finance 34 NFIS FRAMEWORK 2022-2030 14 Priority Pillar IV – Consumer Protection & Desired Outcomes 15 Financial Capability 36 PRIORITY PILLAR I – INCLUSIVE FINANCE 16 PRIORITY PILLAR II – DIGITAL FINANCIAL SERVICES 17 PRIORITY PILLAR III – MSME FINANCE 18 PRIORITY PILLAR IV – CONSUMER PROTECTION & FINANCIAL CAPABILITY 19 Enablers 20 vi LIST OF ACRONYMS AFI Alliance for Financial NPS National Payment Inclusion System AML Anti-Money NFIT National Financial Laundering Inclusion Taskforce CFT Combating of PIRI Pacific Islands Financing for Regional Initiative Terrorism PPSR Personal Property COVID-19 Coronavirus Disease Securities Registry CSOs Civil Society PWDs Persons with Organisations Disabilities DFS Digital Financial RBF Reserve Bank of Fiji Services SDGs Sustainable DSS Demand Side Survey Development Goals FSPs Financial Service TOR Terms of Reference Providers UNCDF United Nations G2P Government-to- Capital Development Person Fund GDP Gross Domestic Product KM Kilometres M&E Monitoring & Evaluation MFIs Microfinance Institutions MSMEs Micro, Small and Medium Enterprises MTOs Money Transfer Operators NDP National Development Plan NFIS National Financial Inclusion Strategy 1 EXECUTIVE SUMMARY The NFIS 2022-2030 builds on two goal of wealth creation and business earlier NFIS; the first from 2010-2014 sustainability. and the second from 2016-2020. The NFIS sets a comprehensive Given the remarkable progress with framework structured around four key the access dimension that continues priority pillars to advance financial to play an important role in financial inclusion for the next nine years: (I) inclusion, the third NFIS shifts its focus Inclusive Finance; (II) Digital Financial to regular usage of financial services Services; (III) MSME Finance; and (IV) that will meaningfully translate to Consumer Protection and Financial resilient and sustainable livelihoods Capability. The framework identifies and businesses. financial infrastructure, legal and The Vision for NFIS is “Empowering regulatory framework and stakeholder Fijians to build resilient and sustainable partnership and collaboration as livelihoods and businesses through critical enablers serving as foundation financial inclusion”. In realising this of the financial inclusion pillars. The Vision, it is expected that Fijians will NFIS incorporates a results framework be able to access and use appropriate with a detailed implementation plan financial services to manage risks and outlining a broad range of activities better plan for the future. and actions that will assist in achieving the strategic objectives as follows: The NFIS supports Government’s 20-Year National Development Plan 1. All Fijians have convenient and (2017-2036) and, for the first time is timely access to affordable aligned to the achievement of the UN products and services offered by SDGs. The NFIS prioritises vulnerable the formal financial sector. and disadvantaged segments of the

2. All Fijians use a range of financial population especially women, youths, products and services to meet rural and maritime communities, lifecycle needs and build financial PWDs and low-income households resilience. due to existing disparities in financial inclusion. By making available financial 3. All Fijians have sufficient financial services that meet the needs of users, education and access to clear, the NFIS will not only lead to financial transparent information that deepening but usage of these services equips them to make informed will also help Fijians to build resilience financial decisions. against economic shocks such as 4. All Fijians receive high quality the COVID-19 and climate change customer service from the financial induced events. It will enable access sector and their interests are to financial resources for enterprises adequately protected. and help them towards the broader 2 The implementation of the NFIS will NFIS objectives will be supported by be guided by the NFIT, a coordinated a robust gender sensitive monitoring structure comprising private and and evaluation (M&E) framework public sector players, government that will include effective collection agencies, CSOs and development of data at the disaggregated level. In partners. The NFIT heads the addition, it is important to evaluate governance structure and is supported the outcomes at the overall NFIS by the Working Groups (WGs) for level as well as the specific policy implementation which will require and programme initiatives. Such an integrated and multi stakeholder evaluations will help assess the impact approach to mobilise resources and of programmes and identify their ensure that the targets are met and intended and unintended outcomes. desired outcomes are achieved. The measurement of progress toward the Figure 1: NFIS Framework for 2022-2030 EMPOWERING VISION FIJIANS TO BUILD RESILIENT & DESIRED AND SUSTAINABLE LIVELIHOODS OUTCOMES AND BUSINESSES THROUGH FINANCIAL INCLUSION FINANCIAL DEEPENING/BUILDING RESILIENCE/WEALTH CREATION TARGET GROUPS UNDERSERVED WOMEN, CHILDREN & YOUTH, PWDs, RURAL AND MSMEs DIGITAL FINANCIAL CONSUMER PROTECTION PRIORITY PILLARS INCLUSIVE MSME & FINANCIAL CAPABILITY SERVICES FINANCE FINANCE FINANCIAL INFRASTRUCTURE ENABLERS LEGAL AND REGULATORY FRAMEWORK STAKEHOLDER PARTNERSHIP & COLLABORATION 3 INTRODUCTION Financial inclusion means happen, the Vision Statement relies on that Fijians are empowered to empowering individuals and businesses safely access and use a broad through the provision of affordable range of affordable and and quality financial services. appropriate financial products The NFIS is closely aligned with a that meet their needs and are number of SDGs, both directly and delivered in a responsible and indirectly. The strategic actions are sustainable way. positioned prominently as an enabler The definition of financial inclusion for: has been modified to reflect the SDG 1 - To end poverty in all intent and spirit of the overall vision its forms; of the third NFIS. The revision of the definition encompasses the SDG 5 - Achieve gender expectations around the usage aspect equality and economic that will be emphasised in the strategy empowerment of women; to ensure that financial products are made affordable, are of high quality SDG 8 - Promote jobs and and appropriate in the Fijian context. economic growth; The foundation of the definition is to SDG 9 - Foster innovations empower Fijians, irrespective of their and build resilient social and economic backgrounds to infrastructure; instill trust and build their financial capacity. SDG 10 - Reduce inequalities; The Vision Statement of the third NFIS has been reformulated to capture SDG 13 -Take urgent action the current and emerging financial to combat climate change inclusion priorities for Fiji. and its impacts; and SDG 17 - Strengthen the Empowering Fijians means of implementation to build resilient and through global partnership sustainable livelihoods and businesses through The development of NFIS involved financial Inclusion significant reflection and consultation with wider stakeholders including, The eventual goal is to help Fijians public and private sectors, FSPs, CSOs build livelihoods and businesses and development partners. that are sustainable and resilient to economic shocks. To make this 4 CURRENT STATE OF FINANCIAL INCLUSION Financial Sector Landscape of the underserved population and The financial sector comprises both this is currently outside the regulatory regulated and non-regulated FSPs. and supervisory ambit of the RBF as The RBF is the primary regulator for a illustrated below (Figure 2). wide range of financial institutions and markets which includes the commercial State of Financial Inclusion banks, the development bank, credit in Fiji institutions, the superannuation fund, Financial inclusion in Fiji has recorded insurance companies, brokers and significant growth in recent years. As agents, capital markets (incl. the of 2020, 81 percent of adult Fijians stock exchange and intermediaries), (50% women) had access to formal foreign exchange dealers and money financial services, compared to 64 changers, payment service providers, percent in 2014 (44% women). The non-bank financial institutions and the banked population accounted for credit information reporting agency. 78 percent in 2020 indicating an The RBF is also the Registrar of Fiji’s improvement in Fijians’ confidence to movable collateral registry. use banking services. From 2016-2020 the financial sector Despite these achievements, 19 grew by 32 percent in terms of gross percent of the adult population remain assets of which 30 percent was excluded from the formal financial growth in the banking sector alone. sector. The harder-to-reach maritime Traditional credit unions, financial and other remote areas reported the cooperatives, moneylenders and highest exclusion rates due to lack of microfinance institutions (MFIs) mainly financial service access points. cater for the financial requirements Figure 2: Financial Sector Landscape of Fiji Regulated Unregulated Institutions Institutions ⊕ Finance Companies ⊕ Commercial Banks ⊕ Microfinance Institutions ⊕ Fiji Development Bank ⊕ Credit Unions ⊕ Insurance Companies ⊕ Cooperatives ⊕ Fiji National Provident Fund ⊕ Money Lenders ⊕ Restricted Foreign Exchange ⊕ Pawn Shops Dealers ⊕ Hire Purchase Providers ⊕ Capital Market Intermediaries ⊕ Mobile Money Operators ⊕ Licensed Credit Institutions 5 Figure 3: Financial Inclusion Strands 2014-2020, 60% 4% 9% 27% DSS 2014 78% 3%1% 18% DSS 2020 (%) 0 20 40 60 80 100 Banked Other Formal Other Informal Excluded Source: Fiji Demand Side Survey Underserved Segments: Women, greater challenges than their Youth, Rural Communities, MSMEs counterparts who live in the urban and PWDs areas, do not have a disability and are Women, youths, PWDs and those literate. in the rural and maritime areas The previous two NFIS paved the way remained underserved and have for financial inclusion dialogue and been the ongoing target of financial actions focusing the attention of the inclusion initiatives in Fiji. Within these RBF, Government and the financial underserved target groups, those sector on segments of the population who live in rural areas suffer from who were still experiencing inequalities potentially life-threatening conditions to access basic financial services. such as HIV/ AIDS, PWDs and those While the target segments recorded who lack basic formal education or are improved access to bank accounts, illiterate are more likely to experience Figure 4: Uptake of Financial Inclusion Instruments 100 90 80 78% 70 71% (%) 60 50 41% 40 29% 30 27% 23% 20 14% 13% 10 7% 8% 5% 5% 5% 5% 0 Source: Reserve Bank of Fiji 6 usage of other financial instruments additional obstacle in expanding remain relatively low as shown in DFS in remote locations and women Figure 4. This limits their opportunities generally have lower levels of digital to sustainably improve livelihoods, financial literacy which can impede build resilience and to start and grow usage although, access is available. businesses in their communities. There is a long history of registered The gender gap in access to yet unregulated financial financial services measured through institutions in Fiji such as MFIs, bank account ownership from the traditional credit unions, financial supply-side was recorded at 13 cooperatives, savings clubs and both percentage points in 2020. The gap formal and informal moneylenders who exists across all financial inclusion cater to the financial requirements of instruments and is primarily a result the underserved population. However, of a low level of literacy and reliance the scale and quality of initiatives on informal financial sources/services. undertaken in these settings are Women also lack opportunities to unable to meet the demand and gain business skills, have more unpaid personal borrowing from friends domestic responsibilities and less and family for instance is ubiquitous. collateral to use when applying for This indicates that the one-size-fits finance. all approach by formal FSPs must be reviewed to ensure that financial On the other hand, the positive products are tailored to the needs of uptake of DFS by the youth (41% in targeted segments. 2020) demonstrates an opportunity to advance financial inclusion for this The 2017 Housing and Population segment. Lessons can be learned from Census reported 18 percent of these sectors to support increasing adult PWDs of which 59 percent womens use for DFS. are banked. Technology is breaking down barriers and enables PWDs to The low population density, harder- access more information and services, to-reach maritime and other remote although there may be few who would areas reported the highest level prefer a person-to-person interaction of exclusion due to inadequate to access services. This often forces distribution of financial access PWDs to rely on someone else to help, points. The average distance to further complicating the process, accessing a financial service in rural compromising security, confidentiality areas is 15 kilometres (KM) compared and privacy. Most importantly, culture to an average of 3KM in urban areas. needs to be shifted to embrace This particularly impacts women and recognise that PWDs have the that have less income and free ability to positively impact economic time to travel to access points and prosperity and that, along with the generally lower volume transactions rest of society, must have equal that incur proportionately higher access to education, employment transaction cost. In addition, limited and the means to support financial telecommunication and Internet independence. connectivity in these areas pose an 7 Inclusive Finance the corresponding needs of those in The use of various financial products the informal sector can potentially such as insurance, remittance and expand the reach of such products. mobile money and other DFS products The insurance uptake has shown have shown significant progress since significant progress reporting more 2014. than a third of Fijians covered with Uptake of credit was significantly an insurance product. However, only low with only 10 percent of Fijians two percent had climate related borrowing from formal sources while insurance specifying limited measures 12 percent resorted to informal in place to protect them against such borrowings (51% are women). This lack events. A major area of concern is of borrowing also constrains MSME that insurance uptake is limited to high growth especially for women-led income groups such as those in formal businesses. employment. The success of the bundled insurance product needs to Savings has significantly reduced be expanded across other segments due to a review of the definition and through greater awareness and classification of supply-side data. literacy among Fijians. The consumer However, Fiji’s population is regarded protection risks with bundled as net savers largely due to the insurance products including lack of superannuation mandatory deduction. understanding from beneficiaries on Although a substantial proportion premiums, the risks covered, and the of the low-income segment use claims process potentially hinders the informal means of savings as it offers ability of the product to be market convenience and flexibility, efforts to driven and limit reliance on subsidies. bring together the formal sector with Product innovation along with scaling Figure 5: Uptake of Financial Inclusion Instruments 84% 60% 38% 37% 30% 27% 12% 7% 10% 5% 8% 7% 6% n.a Bank Credit Savings DFS other Mobile Insurance Pension accounts than Money Mobile Money 2014 Demand Side Survey 2020 Disagregated Data Source: Reserve Bank of Fiji 8 -20% -14% Total MSME Loan as Percentage of Total Private Sector Loan Growth Rate of Total MSME Loan Digital Financial Services Mobile Figure Money 6: Mobile Uptake Money Uptake 70% 62% 60% 55% 50% 42% 40% (%) 27% 30% 24% 20% 10% 3% 0% 2018 2019 2020 Registered Users Active Users Source: Reserve Bank of Fiji up affordable insurance products DFS hold a strong potential for that meets the needs of low-income expanding financial inclusion in Fiji as households, including those in the rural seen during the COVID-19 pandemic areas such as farmers will need to be a where individuals and businesses key focus. opted for more online transactions and Government leveraging digital Fiji is a major remittance recipient payments for G2P transfers. However, country with inward remittance there is still limited uptake and representing eight percent of total usage of DFS among the adult Gross Domestic Product (GDP) in population. In 2020, only 27 percent

2020. Women (57%) are the major of adults actively used the mobile recipients as compared to men (43%). money platform (within the 90-day While the Money Transfer Operators reporting period) despite 62 percent (MTOs) are the most popular means adults registering for mobile money of receiving remittance, the share services. The uptake of other digital of mobile money as a channel for platforms such as internet banking receiving remittance significantly and mobile banking also remained increased from around one percent low among the banked adults at 30 in 2015 to 22 percent in 2021. This and 21 percent respectively. This is increase was driven by a number despite high mobile phone connectivity factors including, expansion of with 139 percent of the population agencies, convenience, fee-free having access to mobile phones and 75 remittance promotion and COVID-19 percent having smartphones. restrictions. The use of remittances should be promoted by increasing Various factors including demand side competition among the service barriers account for the low uptake providers, lowering cost of transaction and usage of DFS including poor and introducing remittance-linked connectivity in rural and maritime financial products that will assist in areas, lack of interoperability among building resilience among Fijians. 9 the service providers, the cost of using The enactment of the National the services, limited acceptance of Payment System (NPS) Act 2021 digital payments by merchants, the is one of the first steps towards lack of DFS regulations and customer reforming and mordenising payment protection frameworks, low digital systems in the country. The Act literacy and lack of trust in the together with NPS Strategy 2022- digital payments. Hence, 88 percent 2026 are expected to promote a of Fijian adults preferred cash as conducive payments ecosystem in Fiji opposed to digital payments. through promotion of interoperable services between various FSPs, DFS have long been provided by improve the uptake of DFS, increase traditional banks and MNOs in Fiji. The the use cases for customers; thereby MNOs entered the market more than helping achieve the country’s financial a decade ago and since then no new inclusion goals. It also provides entrants have penetrated the market. RBF with the mandate of regulating This could be attributed to lack of an and supervising payment system enabling regulatory environment providers and enabling the effective that ensures a level playing field implementation of these reforms and and encourages competition and policy initiatives. innovation. The launch of the FinTech Regulatory Sandbox in December 2019 The NFIS will place emphasis on provided the platform for development expanding the usage of DFS through of innovative DFS solutions and targeted digital literacy campaigns, customer-centric products, however intuitive design of digital finance this will require proportionate products, interoperability, expanded regulations and a robust customer coverage of telecom and internet protection framework to ensure the network, improved use cases for safety of the customers and service various customer segments and providers. Figure 7: MSME Loans MSME Lending 50% 40% 44% (%) 30% 19% 21% 20% 17% 18% 20% 14% 15% 22% 10% 19% 0% 0% 5% 2014 2015 2016 2017 2018 2019 2020 -10% -20% -14% Total MSME Loan as Percentage of Total Private Sector Loan Growth Rate of Total MSME Loan Source: Reserve Bank of Fiji Mobile Money Uptake 70% 10 62% 60% 55% sub-segments and wider partnership institutions). MSME loans grew at between DFS providers and other 5 percent year-on-year in 2020, public and private sector agencies. compared to a higher 19 percent in

2015. The decline in growth rate was MSME Finance mainly due to the perception of MSME MSMEs account for around 18 percent as high-risk propositions which led to of GDP, employ around 60 percent of lending institutions imposing high the working population and account capital and collateral requirements for close to 90 percent of registered thereby limiting access to formal businesses in Fiji. While MSMEs form credit. The latter part of the decline the backbone of the economy, they in 2020 and 2021 was also caused continue to operate largely out of by the COVID-19 pandemic which is the purview of the formal financial consistent with the general decline in sector. private sector credit. The MSME Fiji-Policy Framework 2020 This may be further challenging for (MSME Policy) provides the national women-owned MSMEs where women definition of MSMEs in relation to their already have limited access to credit annual turnover. A “micro” enterprise from the formal lending institutions. In has turnover of up to $50,000; 2020, only seven percent of women a “small” enterprise has turnover borrowed formally and less than 10 from $50,000 to $300,000 and a women-led MSMEs were registered “medium” enterprise has turnover from under the MSME Guarantee Scheme $300,000 to $1,250,000. administered by the RBF. Access to these schemes and incentives for In 2020, MSME loans accounted MSMEs and in particular women-led for less than 20 percent of total MSMEs, are further hindered by private sector loans from formal the lack of collateral, low financial lending institutions (banks and credit literacy, lack of entrepreneurial skills Figure 8: Number of MSME Loans (000) (000) Source: Reserve Bank of Fiji 11 and lack of customised financial peer-to-peer lending, formalising MFIs, products. setting up a specialised institution to serve the MSME sector, and building Various measures developed to capacity of FSPs to support MSMEs improve MSME access to finance and start-ups are yet to be addressed. such as the MSME Credit Guarantee Scheme and secured transaction The lack of data on MSMEs as well reform establishing a moveable asset as the absence of an effective collateral registry mainly focus on the credit bureau also hinder financial bankability of MSMEs. The policies institutions to lend to MSMEs. This and avenues for non-bank financing, provides the necessary areas that alternate financing instruments such need development and improvement in as factoring, leasing, crowdfunding, this new Strategy. Agriculture Sector Lending from Formal Financial Institutions Figure 9: Agriculture Sector Lending from formal financial institutions 10% 8.3% (%) 6.6% 6.8% 8% 6.5% 6.3% 6.4% 5.9% 5.0% 5.3% 6% 4.3% 4.3% 4.8% 4.0% 3.9% 4% 2% 3.5% 3.4% 3.2% 3.6% 3.6% 3.5% 2.8% 0% 2014 2015 2016 2017 2018 2019 2020 % of total agriculture loans to total loans % of Agri-MSME loans to total MSME loans % of agriculture GDP to total GDP Source: Reserve Bank of Fiji Figure 10: Loans to Agri-MSME from formal financial institutions 8% 6% 6% 6% 6% 6% 5% 5% 5% 5% 5% 4% 5% 4% 4% (%) 4% 4% 2% 0% 2014 2015 2016 2017 2018 2019 2020 % of Agri-MSME Loans to Total MSME Loans (volume) % of Agri-MSME Loans to Total MSME Loans (value) Source: Reserve Bank of Fiji 2 2020 Agriculture census reports 37 percent (70,991) of Fiji households listing agriculture as their main economic activity. 12 Agriculture accounts for going forward is to ensure an approximately eight percent of Fiji’s effective translation to usage of GDP and represents the country’s basic financial services in order third largest sector; however, it to stimulate responsible financial receives less than four percent of behaviour at a young age. Educating total loan funding from formal lending children early and teaching them institutions (figure 8) and constitutes to form good savings and financial only five percent of total MSME loans management habits must be (Figure 9). The figure is considered low prioritised. since over a third of Fijian households Consumer protection and targeted list agriculture as their main source financial literacy must be the role of livelihood2. While some growth in of all stakeholders. Programmes the sector is expected as a result should be designed to translate of COVID-related job losses, it is into meaningful usage. This means unclear whether financial products that financial literacy seminars and are meeting the demand and needs workshops must leave participants of small-holder farmers to diversify with practical actions to implement or scale-up productions and mitigate post workshop. This also means that against climate risks. Hence, there the one-off ‘tick the box’ programmes is a need to examine and evaluate are no longer sufficient. Effective financing mechanisms available to follow up and monitoring must be support growth in the agricultural factored into financial literacy plans. sector. This is particularly important for vulnerable groups such as women. Financial Literacy and Consumer Protection DFS has the potential to expand The rapid growth in financial inclusion financial services to remote areas and and technological advancement in to vulnerable groups at a low cost and the financial sector in recent years with convenience, yet 73 percent are has resulted in peoples’ increasing not using mobile money and two thirds access to basic financial services – of banked adults are not actively many for the first time. While this using internet banking (70 percent) in progress is celebrated, the increase 2020. Common reasons highlighted in inclusion brings with it exposure to across the two platforms include lack new risks that consumers may not of digital literacy, awareness on the fully understand. To address these availability of such platforms and risks, consumer protection, market safety concerns of cyber-crime. conduct rules and financial literacy Providers need to ensure that financial programmes targeted at particular literacy is integrated into product segments of the population are marketing and designed to provide imperative. byte sized inputs to people at the time of decision-making or at different In 2013, the NFIT successfully stages of usage of these services. integrated financial education topics into the primary and secondary school curriculum. The challenge 13 NFIS FRAMEWORK 2022-2030 The NFIS framework provides the financial inclusion. Whilst the priority necessary structure to advance pillars target all segments of the financial inclusion for the next nine population, special attention will be years. given to vulnerable groups such as the underserved, women, youth, PWDs, The foundational layer are the key those in rural and maritime areas and enablers that form an integral part MSMEs. All parts of the framework for building a strong footing for a are intertwined to support the desired sustainable and inclusive financial outcomes and vision. system. The four pillars are the priority areas that address the gaps in Figure 11: NFIS Framework 2022-2030 EMPOWERING VISION FIJIANS TO BUILD RESILIENT & DESIRED AND SUSTAINABLE LIVELIHOODS OUTCOMES AND BUSINESSES THROUGH FINANCIAL INCLUSION FINANCIAL DEEPENING/BUILDING RESILIENCE/WEALTH CREATION TARGET GROUPS UNDERSERVED WOMEN, CHILDREN & YOUTH, PWDs, RURAL AND MSMEs DIGITAL FINANCIAL CONSUMER PROTECTION PRIORITY PILLARS INCLUSIVE MSME & FINANCIAL CAPABILITY SERVICES FINANCE FINANCE FINANCIAL INFRASTRUCTURE ENABLERS LEGAL AND REGULATORY FRAMEWORK STAKEHOLDER PARTNERSHIP & COLLABORATION 14 Desired Outcomes for NFIS (ii) Resilience building - supporting The NFIS aims to contribute towards the development of client-centric inclusive economic growth that is products and services to help sustainable through three desired Fijians, especially the vulnerable outcomes: segments, withstand and rebound from shocks like climate change (i) Financial deepening - expanding impacts; and the reach of financial services across various population segments (iii) Wealth creation - strengthening and improve the uptake and usage the legal, regulatory and of these products thus enabling supervisory framework as well as people to effectively meet their create a supportive infrastructure financial life-cycle needs.; to promote MSMEs contribution in economic activity. Figure 12: Desired Outcomes • Expand access and improve usage of financial services • Introduce and implement inclusive finance initiatives • Promote innovation in digital technology, products and channels • Strengthen infrastructure rails FINAN CIA L D H WEALT CREATIO EE • Promote microfinance services for informal PENIN sector N • Promote access to G finance for MSME and key target sectors • Strengthen information architecture for MSMEs IN G D B UIL RESILIENCE • Offer client-centric products and services that build resilience among people • Build financial capability of citizens and trust among customers • Build adaptive capacity of households to climate change 15 PRIORITY PILLAR I – INCLUSIVE FINANCE Objective Support financial deepening through improved access to and use of inclusive financial products and services that meet life-cycle needs and build resilience. Appropriate and affordable financial services provide low-income and vulnerable groups, including women, with the resources they need to make investments and manage unexpected expenses to help them address poverty (SDGs 1 and 5), reduce inequality (SDG 10) and build resilience against the impact of climate change events (SDG 13). Strategic Actions

1. Develop and implement responsive and appropriate policies and guidelines to enable a conducive environment for inclusive financial products and services;

2. Address access and usage gaps to financial products and services for underserved segments;

3. Strengthen pathways to formal financial inclusion for users of informal financial services.

4. Develop affordable and appropriate financial products and services including those to mitigate shocks and build resilience to climate change impact; and

5. Measure access to and usage of broad range of financial products and services at a disaggregated level. Notes: 16 PRIORITY PILLAR II – DIGITAL FINANCIAL SERVICES Objective Foster technological innovations to accelerate access to and usage of affordable and convenient financial products and services. DFS enables financial services such as savings, payments, credit, and insurance to be delivered efficiently at scale with widespread benefits that not only drives growth, but also enables faster progress towards achieving the SDGs. For instance, gender sensitive DFS can facilitate women to be able earn more and build assets contributing to gender equality and economic growth (SDG 5); enable small businesses to grow, innovate, and reach new markets, bringing more people into the digital economy (SDG 9); and create economic opportunities for rural and low- income households by providing new tools and partnerships to actively participate in economic activities and improve financial resilience (SDG 10 and 17). Strategic Actions

1. Promote technology enabled financial products and delivery channels;

2. Promote full interoperability and create an enabling payments ecosystem;

3. Create an enabling regulatory environment;

4. Support DFS infrastructure development; and

5. Develop a gender sensitive FinTech Ecosystem. Notes: 17 PRIORITY PILLAR III – MSME FINANCE Objective Promote economic growth that is broad-based, inclusive and sustainable through improving access to finance for MSMEs and their financial resilience. MSMEs help reduce the proportion of people living in poverty through job creation and economic growth (SDG 1) and play a key role in ensuring women’s active participation in business and trade (SDG 5). With conducive policies in place, MSMEs can help societies achieve higher levels of economic productivity as drivers of diversification, technological upgrading and innovation (SDG 8) and help in providing to low income and the vulnerable groups in particular the underserved regions (SDG 10). Strategic Actions

1. Develop an enabling regulatory framework for MSMEs;

2. Establish a specialised institution for MSME sector;

3. Develop value-chain financing programmes and initiatives; and

4. Develop suitable financial products and services to support start-ups and key target sectors (e.g. agriculture). Notes: 18 Priority Pillar IV – Consumer Protection & Financial Capability Objective Ensure all Fijians have access to high quality financial education and are equipped to make informed financial decisions and ensure safety and protection of consumers. Consumer protection and financial capability can contribute to economic growth and sustainable development by improving financial inclusion and wellbeing as well as bridging the socio-economic gaps and inequalities that restrict access to financial services (SDG 1, 5 and 10). Consumer protection and financial capability can also strengthen consumer resilience to major financial shocks (SDG 13). Strategic Actions

1. Establish a consumer protection framework for the financial sector;

2. Review the complaints management framework and existing dispute resolution mechanisms for financial consumers;

3. Develop and implement a comprehensive and gender sensitive financial literacy strategy; and

4. Implement a robust programme for schools to complement the FinEd Programme. Notes: 19 Enablers Financial Infrastructure A conducive financial infrastructure is essential in enabling wider access to and support the efficient delivery of financial services. The NFIS will strengthen the existing infrastructure such as the credit information system, collateral registry and the digital ecosystem including physical infrastructure while addressing the constraints and making it conducive for use by FSPs and consumers alike. Strengthening these underlying infrastructure are a prerequisite to furthering the financial inclusion objectives of this Strategy. Legal & Regulatory Framework Having an enabling and updated policy, legal, and regulatory framework for financial services is crucial in maintaining an appropriate balance between financial inclusion objectives and financial stability. In this regard, the emphasis is on reviewing the existing legal, regulatory and supervisory frameworks pertaining to different industries within the financial sector, applying proportionality in regulations based on emerging trends to promote innovations, cater for vulnerable segments, support the development of a sustainable and inclusive financial system and protect financial consumers. Stakeholder Partnership & Collaboration The foundation of the NFIS is effective stakeholder partnerships and collaboration. Strong commitment from all regulators, policy makers, public and private sector players, development partners and CSOs is imperative for the successful implementation of the Strategy. This can only be achieved if there is a greater sense of ownership and responsibility from all players to actively participate and collaborate in pursuit of implementing the planned activities and achieving the desired outcomes. 20 COORDINATION STRUCTURE The design of the NFIS underscores The NFIT forms the Governance layer, the involvement of various sectors while the WGs is the Implementation and stakeholders from the public Layer. The NFIT and WGs will be and the private sectors, regulators, supported by the cross-functional development partners and CSOs at Secretariat that is the RBF. The NFIT the implementation stage. A strong and its WGs will have a gender focal buy-in and active involvement of these point to ensure that targets set for stakeholders under the leadership of womens’ equal access to financial RBF ensures that all agencies share a inclusion are met. common vision and remain committed The figure below provides an overview towards the successful implementation of the coordination structure for the of the NFIS and optimum utilisation of NFIS. resources. Figure 13: Coordination Structure NATIONAL FINANCIAL INCLUSION TASKFORCE (NFIT) SECRETARIAT (RBF) INCLUSIVE DIGITAL FINANCIAL MSME CONSUMER FINANCE SERVICES WG FINANCE PROTECTION & FINANCIAL WG WG CAPABILITY WGs 21 National Financial Inclusion The WGs will comprise relevant Taskforce stakeholders related to the thematic area and must include FSPs from The NFIT was constituted in 2010 and public and private sectors, other was guided by a Terms of Reference implementing agencies, industry (TOR). The roles and responsibilities bodies, donors, development agencies under this TOR have been revised etc. These members will include senior and updated in line with the strategic officials designated to handle relevant goals and priorities of the third NFIS. technical matters in their respective Broadly, the NFIT will continue to organisations. Each WG will be chaired function as the apex body providing by a member from the respective strategic guidance and oversight to WG membership pool. The appointed the various policies, programmes and official of the agency would be at a initiatives pursued under the NFIS and senior management level. The deputy approve appropriate course correction chairperson will be a senior officer of including revision in NFIS action plan if the RBF who will assist in guiding WG needed. activities in alignment with meeting the The composition of membership will NFIS deliverables and targets. include high level officials from RBF, Subgroups can be formed by each WG Government, representatives from during the NFIS period to implement FSPs development partners and chairs specific activities outlined in the of the WGs. In certain cases, other implementation plan. institutions or subject-matter experts may be invited as temporary members Secretariat to join the NFIT. The Secretariat will assist and Working Groups coordinate the WGs and NFIT in carrying out their responsibilities. The The core purpose of the WGs is to Secretariat is a part of RBF and will operationalise related activities in monitor and evaluate the progress accordance with the implementation of NFIS targets, undertake relevant plan and timelines. The TOR for each research, provide logistical and WG will be drawn separately based administrative support to the NFIT, on their mandated area. Broadly, WGs and any other body or committee each WG is required to develop annual formed as part of the implementation action plans (including timelines, of the Strategy. The Secretariat will targets, delegation of responsibilities also be responsible for liaising with etc.) related to respective thematic external parties such as donors, areas which will then be approved consultants and independent experts by NFIT; implement and undertake as needed. activities as envisaged under the action plan; and submit quarterly progress updates with respect to related activities and targets to the NFIT. 22 STAKEHOLDERS To translate the vision and objectives of the NFIS, all stakeholders (public and private) will need to work in tandem to realise individual targets and the collective goals of the Strategy. The implementation of the Strategy will require an integrated and multi stakeholder approach to ensure that the targets are met and desired outcomes are achieved. The table below provides an ecosystem view of various stakeholders directly or indirectly involved in the financial inclusion agenda. Stakeholder Roles and Responsibilities The broad set of roles and responsibilities of stakeholders are provided below: Table 1: Financial Inclusion Key Stakeholders Category Roles and Responsibilities Other • Ensure enabling regulatory and supervisory framework is in place for financial inclusion; Regulators • Coordinate and monitor financial inclusion initiatives; • Provide advice to government and providers on financial inclusion initiatives and developments; and • Ensure compliance with financial inclusion policies. Government • Ensure a broad-based commitment to financial inclusion within their respective Ministry; Ministries and • Align respective sectoral and other plans with the goals approved by the NFIS (to the extent Public Sector applicable); • Implement programmes in partnership with other public sector agencies and/or private sector agencies providers; and • Provide disaggregated data on financial inclusion to RBF. Financial • Implement programmes, projects and products as proposed by the various WGs; and Service • Provide relevant and disaggregated data on financial inclusion to RBF in a timely manner, as per Providers prescribed guidelines. Development • Provide advisory and technical assistance to regulators and policymakers for legal and policy Partners frameworks; • Provide support to Government Ministries in design of suitable programmes to achieve financial inclusion for women, youth and other target segments; • Share best practices from across the globe on emerging innovations; • Provide financial support and technical know-how to FSPs on developing customer-centric and data driven financial products and services; and • Provide support in piloting new technologies, products, and programmes. CSOs and • Implement programmes, projects and products as proposed by the various WG; and Industry Bodies • Disseminate information and awareness about financial inclusion programmes. 23 MONITORING & EVALUATION The M&E framework entails The primary responsibility for complete buy-in and ownership coordination of the M&E framework of all stakeholders involved in the rests with the NFIS Secretariat. The implementation of NFIS. This implies Secretariat will undertake continuous that stakeholders not only take monitoring of the programme to responsibility for activities and ensure that results are in conformity programmes to be implemented but with the planned outcomes, track also for effective collection of data the performance of indicators vis- for monitoring and measuring the à-vis targets, and monitor overall progress of NFIS initiatives, including progress in accordance with the NFIS the collection of disaggregated data. implementation plan and specific action plans of the WGs. The main objectives of the M&E framework are to: The scope of the M&E framework includes a structure for assessing 1. detail a plan of action under national-level progress towards each strategic pillar including objectives set forth in the NFIS, using key performance indicators and defined gender sensitive indicators associated targets; and targets. The M&E framework 2. monitor and measure the overall includes a separate set of indicators progress of the NFIS vis-à-vis for each strategic pillar. These the planned outcomes through indicators represent outcomes that appropriate measurement tools are more directly linked with specific from both the supply and demand- NFIS actions and are qualitative and side; quantitative in nature. Indicators are 3. undertake regular analysis of data drawn from the Alliance for Financial to identify trends, opportunities Inclusion (AFI) Core Set of Financial and challenges; Inclusion Indicators, DFS, SME Finance Base, SME Finance Plus, Mobile 4. provide periodic reports to help Financial Services, Quality Indicators stakeholders in the decision-making as well as the Pacific Islands Regional process; Initiative (PIRI) set of indicators, 5. make adjustments in approaches the G20 Set of Financial Inclusion and strategies for relevance, Indicators and are tailored to the Fijian efficiency, effectiveness, context and disaggregated by gender, sustainability and impact; and age and location. The M&E framework will be measured through the supply- 6. ensure that the M&E is undertaken side disaggregated data that the in a gender sensitive way. RBF collects on an annual basis. The indicators and targets will be reviewed 24 and updated on an annual basis and intended and unintended outcomes. as needed. Given the long-term duration of the NFIS, it is proposed to conduct a In addition to monitoring the progress short-term (2024), mid-term (2027) of NFIS, it is important to evaluate as well as end-of-period evaluation the outcomes and financial inclusion (2030). The short and mid-term progress at the overall NFIS level evaluation will, inform how the as well as that of specific policy Strategy is contributing towards and programme initiatives. Such national goals and revisions will be evaluations will help assess the impact made where necessary. of programmes and identify their 25 RESULTS FRAMEWORK Table 2: Financial Inclusion Indicators Medium Financial Short Term End of NFIS Baseline Term No Inclusion Indicator Target Target 2020 (p) Target Dimensions (2024) (2030) (2027) Indicators at Impact level Percentage of population 86% 1 (age 15+) financially 84% 88% 90% (17,156) included (formal) 80% 2 Women 78% 83% 85% (11,550) Access 75% 3 Youth 71% 80% 85% (13,180) Indicators for Priority Pillar I – Inclusive Finance Number of access points 124 4 122.5 TBD TBD per 10,000 adults (192) Percentage of population 5 (age 15+) with a regulated 5% TBD TBD TBD savings account 6 Women 5% TBD TBD TBD 7 Youth 5% TBD TBD TBD Percentage of population 8 (age 15+) with a regulated 10% 15% (32,841) 18 20 credit account Usage 9 Women 7% 10% (11,246) TBD TBD 10 Youth 8% 12% (10,574) TBD TBD Percentage of population 40% 11 (age 15+) covered under 37% 45% 50% (23,532) an insurance policy Percentage of population 12 (age 15+) with a 71% 73% (18,196) TBD TBD superannuation account. 26 Medium Financial Short Term End of NFIS Baseline Term No Inclusion Indicator Target Target 2020 (p) Target Dimensions (2024) (2030) (2027) Indicators for Priority Pillar II – Digital Financial Services Percentage of the population (age 15+) with 13 an active mobile money 27% 31% (26,381) 35% 40% account (used at least once in the last 90 days) 14 Women 27% 31% (14,621) TBD TBD 30% 15 Youth 23% TBD TBD (19,368) Percentage of population (age 15+) making or 16 30% 34% 37% 45% receiving digital payments other than mobile money 17 Women 29% 32% TBD TBD 18 Youth 41% 45% TBD TBD Number of DFS 19 22 30 35 40 transactions per account Number of mobile money 20 Usage 21 30 35 40 transactions per account Indicators for Priority Pillar III– MSME Finance Percentage of MSMEs with a deposit account 21 TBD TBD TBD TBD at a regulated financial institution 22 Women TBD TBD TBD TBD 23 Youth TBD TBD TBD TBD Percentage of MSMEs with an outstanding loan 24 TBD TBD TBD TBD account at a regulated financial institution 25 Women TBD TBD TBD TBD 26 Youth TBD TBD TBD TBD Number of MSMEs using 27 alternative financing TBD TBD TBD TBD mechanisms 27 Medium Financial Short Term End of NFIS Baseline Term No Inclusion Indicator Target Target 2020 (p) Target Dimensions (2024) (2030) (2027) 28 Women TBD TBD TBD TBD 29 Youth TBD TBD TBD TBD Number of MSMEs with an 30 Usage TBD TBD TBD TBD insurance cover 31 Women TBD TBD TBD TBD 32 Youth TBD TBD TBD TBD Share of MSME loans in 33 14% 16% 25% 30% business loans Indicators for Priority Pillar IV – Consumer Protection & Financial Capability Percentage of complaints 34 registered with LFIs and 95% 98% TBD TBD resolved within 3 months. Percentage of children Quality (below 14yrs) with a 8% 35 savings account at 4% 15% 20% (10,900) a formal financial institution Percentage of population reached through financial 80% 36 74% 85 90 literacy awareness (59,165) campaigns 37 Women TBD 20,000 TBD TBD 38 Youth TBD 30,000 TBD TBD 39 PWDs TBD 30,000 TBD TBD Note: TBD – To Be Determined. Baseline data is not yet available. The Strategy’s implementation plan includes the collection of related data. 28 IMPLEMENTATION PLAN PRIORITY PILLAR I – INCLUSIVE FINANCE Implementation No. Strategic Actions Activities Lead WG Strategic Measures Timeline Develop and implement 1.1.1 Develop and implement responsive and appropriate guidelines for Inclusive Green Short Term Inclusive Finance Policy Guideline policies and guidelines Finance – including definitions and 1.1 to enable a conducive taxonomy. environment for inclusive 1.1.2 Develop and implement policies financial products and to enable customer-centric products Medium Term Inclusive Finance Policies/Guidelines services. and service innovations. 1.2.1 Review and update geospatial 29 map of financial access points and Short-Medium Web-based interactive geospatial map for financial Inclusive Finance develop expansion strategy to cover Term inclusion underserved locations. Address access and usage gaps to financial 1.2.2 Facilitate greater penetration Number of access points per 10,000 adults; 1.2 of agent networks and other cost- Percentage of administrative units with at least one products and services for underserved segments. effective delivery channels in focus access point. Short-Medium geographies (rural areas, remote Inclusive Finance Percentage of total population living in administrative Term and maritime regions etc.). units with at least one access point Number of cash-in and cash-out access points per 10,000 adults 1.3.1 Develop plans for digitising Inclusive Finance Strengthen pathways to informal savings group and other Medium Term Number of savings groups linked to FIs DFS formal financial inclusion FSPs. 1.3 for users of informal 1.3.2 Conduct a study to identify financial services. measures to reduce informality and Medium Term Inclusive Finance Assessment report implement recommendations. PRIORITY PILLAR I – INCLUSIVE FINANCE (CONTINUED) Implementation No. Strategic Actions Activities Lead WG Strategic Measures Timeline 1.4.1 Promote the design and implementation of financial products and services for target segments for environmentally sustainable Number of products and services implemented to build activities and adaptation to climate Inclusive Finance resilience and responds to climate change and shocks. change and to respond to shocks Short-Medium e.g., credit lines, credit guarantee Term Develop affordable and funds, savings solutions, remittances appropriate financial and insurance. products and services 1.4 1.4.2 Design approaches to reduce including those to mitigate barriers to accessing financial Percentage Regulated FIs with tiered KYC product shocks and build resilience Short Term Inclusive Finance services especially for the target requirements 30 to adverse impacts of group. climate change. 1.4.3 Design, test and adopt Percentage of adults with a regulated savings account; customer-centric, digital-enabled Percentage of adults with a regulated credit account; financial products and services No. of remittance-linked products introduced Short-Medium e.g., savings, credit, payments, Inclusive Finance Percentage of adults with remittance-linked products Term investments, insurance remittances Number of persons covered under a parametric/index and pension. insurance product. Percentage of adults using digital payments 1.5.1 Collect and analyse data Measure access to and received from the supply-side Inclusive Finance/ Annual financial inclusion data published at a Short-Long Term usage of broad range of to monitor progress of financial NFIS Secretariat disaggregated level. 1.5 financial products and inclusion initiatives. services at a disaggregated 1.5.2 Review the disaggregated level. Inclusive Finance/ data policy to align with financial Medium Term Revised disaggregated data policy statement. NFIS Secretariat inclusion data needs. Note: Short Term: 2022-2024 | Medium Term: 2025-2027 | Long Term: 2028-2030 PRIORITY PILLAR II – DIGITAL FINANCIAL SERVICES Sr. Implementation Strategic Actions Activities Lead WG Indicators No. Timeline 2.1.1 Review and issue agency An updated and standard guidelines issued for guidelines that create enabling engagement of agents by banks and non-bank payment agent network for all FSPs and that Short Term DFS service providers clearly eliminate agent exclusivity. Percentage of agents that are non-exclusive 2.1.2 Promote use of agents by No. of DFS agents per 10,000 population authorising and licensing payment Short Term DFS No. of DFS women agents per 10,000 population service providers. 2.1.3 Develop and publish an Agents Medium Term DFS Agents Registry is accessible to public Registry. Promote technology 2.1.4 Expand outreach of insurance Short-Medium Percentage of adults with insurance product 31 2.1 enabled financial products and pension products through DFS Term Percentage of retired adults with pension and delivery channels. application of digital technology. 2.1.5 Advocate and encourage payment service providers to widely DFS/Consumer Number of merchants with digital payments acceptance deploy point of sale digital payment Short-Medium Protection solutions such as QR, EFTPOS terminals and other acceptance solutions, such as QR Term & Financial products. Codes and Electronic Funds Transfer Capability Point of Sale terminals. 2.1.6 Create awareness and DFS/Consumer encourage Government to utilise Protection Percentage of P2G payments delivered via digital digital payment services for Person- Short Term & Financial channels to-Government payments e.g., mobile Capability money, EFTPOS, QR Codes, etc. PRIORITY PILLAR II – DIGITAL FINANCIAL SERVICES Sr. Implementation Strategic Actions Activities Lead WG Indicators No. Timeline 2.2.1 Establish partnerships with start-ups, corporates, innovation hubs and other actors to develop Number of partnerships established to develop the Medium Term DFS the digital economy, with a focus on digital economy. serving vulnerable and hard to reach communities. Promote full interoperability 2.2 and create an enabling 2.2.2 Promote and encourage Percentage of adults making or receiving a digital payments ecosystem. interoperable payment products and payment services. Cashless retail transactions per capita Data on the use of digital payment instrument Short Term DFS issued by one payment service provider over the infrastructure of another unaffiliated payment service 32 provider. 2.3.1 Strengthen, refine and update KYC and AML/CFT regulations to DFS/Consumer Percentage of regulated FIs with tiered KYC product harmonise across products and Protection requirements Short Term introduce tiered, risk-based KYC & Financial Number of accounts opened with reduced/simplified Create an enabling guidelines with a focus on providing Capability KYC. 2.3 regulatory environment. access for vulnerable groups. 2.3.2 Develop a centralised e-KYC Short-Medium database for market players to DFS e-KYC Database Term verify customer KYC requirements. 2.4.1 Support Government initiatives Percentage of adult population accessing internet Medium Term DFS to broaden network connectivity. connectivity Support DFS infrastructure 2.4.2 Engage stakeholders 2.4 development. to enhance and implement Percentage of adult population accessing internet Medium Term DFS infrastructure-sharing avenues at connectivity reduced costs. PRIORITY PILLAR II – DIGITAL FINANCIAL SERVICES Sr. Implementation Strategic Actions Activities Lead WG Indicators No. Timeline 2.5.1 Develop and implement a Successful launch and implementation of FinTech gender sensitive FinTech Strategy Short Term DFS Strategy for Fiji. 2.5.2 Review and refine FinTech Short Term DFS Revised Regulatory Sandbox Guidelines issued Regulatory Sandbox Guidelines. 2.5.3 Promote regulatory sandbox across the region and encourage Short-Medium DFS Number of solutions tested in the Sandbox Develop a gender sensitive innovative FinTech to test their Term 2.5 FinTech Ecosystem. solutions in the sandbox. 2.5.4 Develop licensing and supervisory framework to regulate Graduates of the FinTech Regulatory Sandbox licensed Medium Term DFS 33 graduates of the FinTech Regulatory and/or supervised by RBF Sandbox. 2.5.5 Promote collaboration between FSPs and FinTech to stimulate Medium-Long Number of new products and services through collation DFS innovations e.g., Open APIs, Direct Term between incumbent FSPs and non-banks or FinTechs. Debits, etc. Note: Short Term: 2022-2024 | Medium Term: 2025-2-27 | Long Term: 2028-2030 PRIORITY PILLAR III – MSME FINANCE Sr. Implementation Strategic Actions Activities Lead WG Indicators No. Timeline 3.1.1 Implement regulatory framework MFI & ODTI Regulations Short Term MSME Finance for MFIs and ODTIs. 3.1.2 Build supervisory capacity Capacity building/trainings conducted of regulators to proportionately Short-Medium MSME Finance regulate and supervise MFIs and Term ODTIs. Develop an enabling 3.1.3 Assess the institutional, Assessment report 3.1 regulatory framework for operational and governance Short Term MSME Finance MSMEs. constraints in MFIs, Credit Unions and Financial Co-operatives. 3.1.4 Strengthen the use of Fiji’s Availability of a broad-base credit information registry 34 Medium Term MSME Finance Credit Information Registry. 3.1.5 Strengthen and streamline the Number of vendors registered in PPSR Personal Property Security Registry Medium Term MSME Finance Number of customers registered in PPSR (PPSR). 3.2.1 Provide MSMEs with business development and related services – Medium Term MSME Finance improve bankability and access to Number of MSMEs accessing related services. credit. Establish a specialised 3.2 institutionto cater for the 3.2.2 Propose options for the MSME sector. establishment of specialised MSME Medium Term MSME Finance Concept paper with proposed options. institution. 3.2.3 Cabinet Paper for approval of Medium Term MSME Finance Cabinet paper. MSME institution. PRIORITY PILLAR III – MSME FINANCE Sr. Implementation Strategic Actions Activities Lead WG Indicators No. Timeline 3.3 Develop value-chain 3.3.1 Build capacity of FSPs to offer Number of capacity trainings conducted for FSPs financing programmes and agriculture value-chain financing Short Term MSME Finance Number of FSP participants attending capacity building initiatives. (e.g. warehouse receipt financing). training. 3.4.1 Conduct a feasibility study to Assessment Report assess market potential and demand New business lending under alternative platforms for for alternative financing products Medium Term MSME Finance MSMEs for MSMEs with a focus on closing the gender gap in access to finance. 3.4.2 Undertake assessment to Percentage of MSMEs with a deposit account at a determine existing constraints regulated financial institution Develop suitable financial and potential actions to remove Percentage of MSMEs with an outstanding loan at a products and services to 35 impediments to accessing financial Short Term MSME Finance regulated financial institution 3.4 support start-ups and services for MSMEs – bank account, Percentage of MSME loans assessed with information key target sectors (e.g. credit etc, with special focus on from PPSR and/or credit rating agency agriculture). women-led MSMEs. 3.4.3 Develop guidelines for promoting agricultural and MSME Medium Term MSME Finance Issue Guidelines insurance. 3.4.4 Develop a MSME Information Short-Medium MSME repository and database MSME Finance Repository and Database. Term MSME baseline indicators 3.4.5 Develop a national definition Short Term MSME Finance Women-led MSME definition for women-led MSMEs. Note: Short Term: 2022-2024 | Medium Term: 2025-2-27 | Long Term: 2028-2030 PRIORITY PILLAR IV – CONSUMER PROTECTION & FINANCIAL CAPABILITY Sr. Implementation Strategic Actions Activities Lead WG Indicators No. Timeline 4.1.1 Review, clarify and develop Consumer Available legal provisions to mandate financial relevant legal provisions to establish Protection consumer protection regulation Medium Term mandates for financial consumer & Financial protection regulation and supervision. Capability 4.1.2 Develop policy and regulatory Consumer Regulatory Framework for financial consumer framework for financial consumer Protection protection. Medium Term protection. & Financial Establish consumer Capability protection framework for 4.1 4.1.3 Build capacity of regulator Consumer Number of capacity trainings conducted the financial sector. to undertake financial consumer Medium-Long Protection Number of participants in consumer protection protection supervision. Term & Financial supervision trainings. 36 Capability 4.1.4 Design and undertake awareness Consumer Number of awareness campaigns conducted campaigns on consumers right and Protection Percentage of population reached through awareness responsibilies with respect to financial Ongoing & Financial campaigns measured by women, youth and PWDs. services, particulaly focusing on Capability reaching vulnerable groups. 4.2.1 Review and refine existing Consumer Reviewed policy guideline for complaints management complaints handling protocols for Protection Short-Term financial institutions and include & Financial other FSPs such as MNOs. Capability Review the complaints 4.2.2 Undertake focused campaigns Consumer Number of focused campaigns management framework to strengthen customer awareness of Protection Percentage of population reached from awareness of 4.2 and existing dispute Ongoing dispute-resolution channels. & Financial dispute-resolution channels resolution mechanisms for Capability financial consumers. 4.2.3 Develop online portal to register, Consumer Online portal for complaints data collect and monitor complaints Protection Medium Term data and publish reports at regular & Financial intervals at a disaggregated level. Capability Priority Pillar IV – Consumer Protection & Financial Capability (continued) Sr. Implementation Strategic Actions Activities Lead WG Indicators No. Timeline 4.3.1 Review existing landscape Consumer Financial/digital literacy strategy (demand and supply) of financial Protection literacy programmes and develop Short Term & Financial a comprehensive gender sensitive Capability programme aligned to the NFIS. 4.3.2 Implement the financial/digital Consumer Action items implemented from the financial/digital literacy program and establish a Protection literacy strategy Develop a comprehensive Short-Long Term national coordination mechanism for & Financial Number of ToTs conducted; gender sensitive Financial stakeholders. Capability Number of accredited Trainers. 4.3 Literacy Strategy. 4.3.3 Conduct ToT for target group Consumer Number of ToTs conducted for the target group; including women, youth and PWDs. Protection Number of accredited Trainers for the target group. Short-Long Term 37 & Financial Capability 4.3.4 Monitor and evaluate Consumer M&E Report effectiveness of financial literacy Protection Long Term programs & Financial Capability Priority Pillar IV – Consumer Protection & Financial Capability (continued) Sr. Implementation Strategic Actions Activities Lead WG Indicators No. Timeline 4.3.5 Develop financial literacy Consumer Financial literacy Manual content focused on use of specific Protection products (insurance, pension, climate & Financial change etc.) digital technologies, Capability Short Term delivery channels, rights and protection of consumers, dispute 4.3 resolution mechanisms etc. by target groups 4.3.6 Make available financial literacy Consumer Financial Literacy Manual in vernacular modules in local languages Protection Medium Term & Financial Capability 4.4.1 Review and refine existing Consumer Revised FinED manual financial education modules to make Protection Implement a robust Medium Term them outcome-oriented. & Financial programme for schools Capability 4.4 to complement the FinEd Programme. 4.4.2 Put in place a measurement Consumer M&E Framework for FinED and monitoring system that tracks Protection Medium Term the progress and impact of financial & Financial education. Capability Note: Short Term: 2022-2024 | Medium Term: 2025-2-27 | Long Term: 2028-2030 Notes: Notes: Fiji National Financial Inclusion Strategy 2022-2030