22nd ICSD Theme 6D: Banking and financial capabilities -

Speaker

Joseph France
Director and Head of Financial Stability Department
Bank of Ghana

Banking and financial capabilities

Biography

Joseph France is a Director and Head of Financial Stability Department of the Bank of Ghana. He was previously with the Banking Supervision Department of the Bank of Ghana where he worked for twenty years in various capacities before moving to the Financial Stability Department as the head. He is a Chartered Accountant and worked with Deloitte and Touche (Chartered Accountants and Management Consultants) for almost nine years before joining the Bank of Ghana. He holds an MBA in Marketing from the University of Ghana Business School and a PhD in Finance from University of Costa Rica Business School having gone through the course work and seminars relevant to the chosen specialization at the Kwame Nkrumah University of Science and Technology. He has been a short-term consultant to the World Bank through which he established the policy framework and trained staff of the banking industry in The Gambia including the Central Bank of the Gambia on International Financial Reporting Standards. He was a consultant to the West African Monetary Authority on the harmonization of Regulation and Policy of the Banking Industry in the ECOWAS region. He has been a lecturer at the Banking College in Ghana and the West African Institute of Financial and Economic Management in Nigeria for central banks of countries in the West African Monetary Zone. He is a member of the Board of the Institute of Chartered Accountants (Ghana) Training School and the Vice Dean of the Faculty of Financial Management at the Institute of Chartered Accountants, Ghana. He is married with three children.

Dr Christine Avortri
Head, Professional Education And Development
Chartered Institute of Banking-Ghana

Banking the Nations Unbanked: The Fundamental Policy Issues of Promoting Financial Capability

Abstract Narrative

“Background. Financial capability facilitates day-to-day living, and helps families and businesses plan for everything from long-term goals to unexpected emergencies. As account holders, people are more likely to use other financial services, such as credit and insurance, to start and expand businesses, invest in education or health, and manage risks and financial shocks, which can improve the overall quality of their lives. The 2017 Global Findex database shows that 1.2 billion adults have obtained an account since 2011, including 515 million since 2014. Between 2014 and 2017, the share of the population who have an account with a financial institution or through a mobile money service rose globally from 62% to 69%. In developing economies, the share rose from 54% to 63% (World Bank 2017). Since 2010, more than 55 countries have made commitments to financial inclusion, and more than 60 have either launched or are developing a national strategy. Studies from research indicate that when countries take a strategic approach and develop national financial inclusion strategies by bringing together financial regulators, telecommunications, competition, and educational institutions, they increase the pace and impact of reforms. Therefore, this presentation will highlight Ghana’s experience in developing a National Financial Inclusion and Development Strategy (NFIDS). Discussion. The presentation will discuss the role of the Chartered Institute of Bankers-Ghana (CIB-Ghana) in developing the national strategy. For over three decades, CIB-Ghana, under the Professional Bodies Decree of 1973 (NRCD 143) with 30 professional members and 11 corporate members, has led the development and regulation of banking professionals in Ghana. The presentation will highlight CIB-Ghana’s lessons learned in the development and adoption of the NFIDS. Specifically, the presentation will discuss CIB-Ghana’s role in (a) collaborating with the Bank of Ghana in the development of the strategy, (b) coordinating the review of the strategy by its professional members, and (c) lobbying for the strategy, and (d) helping educate the public about the benefits of the strategy. Conclusion. Although attempts to bank the unbanked go back to independence in Ghana, there was no comprehensive national strategy to ensure financial inclusion for all. One of the lessons learned in the lobbying for the national strategy was the need to strengthen the policymakers’ knowledge and understanding of financial capability. Also, to realize the NFIDS’ vision of increasing access to formal financial services from 58% to 85% by 2023, there is a need for greater investment in its implementation. These investments will be critical not only for the unbanked in Ghana, but would be beneficial to the greater financial well-being of the entire 30 million Ghanaian population. ”

Biography

Dr. Mrs. Christine Avortri was a lecturer at the University of Professional Studies, Accra, Ghana with the Banking and Finance Department from 2012 to March, 2021. She is currently the Head of Department, Professional Education and Development , Chartered Institute of Bankers, Ghana. She is an author of banking books and articles. She holds PhD in Business Administration and an Associate member of Chartered Institute of Bankers, Ghana.

Dr Njeri Kagotho
Associate Professor
College of Social Work, Ohio State University

Financial Capabilities: Do Informal Institutions Matter?

Abstract Narrative

Introduction: Economic interactions are governed by formal institutions (statutory laws, policies, and regulations), informal institutions (customary laws, religious tenets, and corruption), and governance structures. In the financial capability and asset-building literature, institutions are defined as “purposefully designed rules, and policies that shape savings behaviors and asset accumulation” (Beverly et al., 2008,
p. 10). Institutions in this body of work have been conceptualized broadly as the policy environment (laws, regulations), financial intermediaries (banks, credit unions), products and services (retirement, credit facilities), and financial curricula and other training tools (Sherraden, M. S., 2013). The role of informal institutions, which are pervasive in everyday life, has remained largely absent in this body of work. And yet we know that the transactional nature of informal and formal institutions in regions such as sub- Saharan Africa (SSA) do add a layer of complexity in economic functioning (Kagotho, 2014, 2019).

This presentation argues that the region’s unique landscape necessitates a shift in our current conceptual modeling to incorporate informal mechanisms which while fluid, unstructured, and socially regulated continue to impact the economic behaviors and well-being of the clients we serve.

Institutions and Financial Capabilities: Informal institutions play a significant role in the economic functioning of at-risk groups living in emerging and developing economies. This is because customary norms and mores are in part devoted to adjudicating property rights, regulating access to financial resources, and controlling intergenerational wealth transfers. In recent years, SSA has seen a realignment of policies in the financial sector that have been responsive to the region’s economic trends. However, as progressive as these have been, individuals still contend with deeply entrenched patriarchal structures, and regressive customary laws that constrain economic functioning. A review of an emerging body of qualitative work from across the continent portrays these informal mechanisms as economically disenfranchising to women, children, and other marginalized groups. Closely aligned to these customary laws are religious and spiritual beliefs which are ubiquitous in daily life including around financial decision making (tithes, and credit practices). Faith leaders also exert religious sway in the policy environment, pushing back when policies and programs contradict religious and spiritual dictates. Notwithstanding this complex relationship, religious gatekeepers continue to be important partners in economic empowerment interventions (Ssewamala & Ismayilova, 2008). Finally, corruption—generally defined as the abuse of power and position for personal gain—unduly impacts economic functioning. Regardless of the level at which it occurs, corruption obstructs the delivery of services, makes transaction costs difficult to ascertain, and leads to distrust of formal institutions critical in supporting financial capabilities (Kagotho 2014).

Conclusion: Institutions are complex. Moving forward, we argue for the unraveling of these complexities, by examining how informal and formal institutions interact to constrain economic behavior. This approach would extend our statistical modeling beyond the highly structured mechanisms first discussed in Sherraden, (1991) to encompass institutional constructs that are fluid, unwritten, and socially regulated. Identifying and testing these factors will inform effective implementation of our interventions as the field moves towards personalization of the financial services we offer.

Biography

Dr. Njeri Kagotho is a social worker and an associate professor at Ohio State University College of Social Work. Her research—which is deeply influenced by her international practice— explores the incontestable link between a family’s wealth holdings and the health behaviors and outcomes of its members. In recent years, Njeri has investigated how economic and health behavior is formed at the intersection of informal institutions (culture, social norms, and mores), and formal institutions (statutory laws, policies, and regulations). Her scholarship corroborates current science which has determined that institutions and governance have a very real impact on well-being, regardless of people’s income and geography. Dr. Kagotho’s scholarship spans three continents and applies a transformative lens, recognizing participant-researcher power differentials and centering community voices to further the pursuit of social justice.

Mr Cedrick Joseph Wabwire
Research Supervisor
Department of Social Work, Uganda Christian University

Secondary School Students’ Money Management Behaviors and the Implications for Emergency Savings in Uganda

Abstract Narrative

“Background: In line with Uganda’s Vision 2040 that aims to lift all Ugandans out of poverty, the Uganda National Financial Inclusion Strategy was developed to enhance financial security through improved access and usage of quality and affordable financial services and products. However, financial vulnerability remains widespread among young people, risking further slip into poverty. Therefore, this study examines how young people engage with financial institutions to achieve financial security. Specifically, the study assesses (a) the relationship between young people’s attitudes towards financial institutions and their financial security measured by their level of emergency savings, and (b) how money management behaviors mediate this relationship. Methods: The study used cross-sectional data from a secondary school in Mukono Municipality in Uganda. Descriptive and inferential statistical analyses were conducted to address Objective A (direct relationship). The Hayes’ PROCESS macro was used to address Objective B (mediational relationship). Results: Participants (n=164) Most participants were female (n=99; 60.7%) with an average age of 17.75 years. Most participants (n=144; 84%) indicated that they had set money aside for rainy days. The direct relationship between attitudes towards financial institutions and emergency savings was not significant (b=-0.05, p=.80). Attitudes towards financial institutions were positively associated with higher money management behaviors (b=0.06, p<.05), and money management behaviors were, in turn, associated with higher emergency savings (b=0.31, p <.001, 95% ), suggesting a mediational relationship. Conclusion and Implications: The findings show that youth with positive attitudes towards financial institutions and positive money management behaviors are more likely to save for emergencies, which is an essential step toward financial security. These findings have implications for youth-tailored financial products, training, and policies geared toward improving their financial well-being and security. ”

Biography

Cedrick Joseph Wabwire is a Research Supervisor at Uganda Christian University’ Department of Social Work. He is also a Team Leader at the Grounders, a non-governmental organization focused on advancing financial Capability among the youth. He holds a master’s degree in research and public policy, and a bachelor’s degree in development studies. His research broadly explores the link between youth’s financial capabilities, civic engagement, and youth development. Previously, he worked as a credit officer for Kenya commercial bank- Uganda and standard chartered bank, a business development manager for StarTimes- Uganda, and as an
insurance broker for Jubilee Insurance-Uganda. These experiences have informed Cedrick’s work in promoting financial wellbeing and poverty reduction policies in Uganda and across sub-Saharan Africa.

Dr Gyimah Larbi
FCIB, DBA

Banking and financial capabilities

Mr Cedrick Joseph Wabwire
Research Supervisor
Department of Social Work, Uganda Christian University

Strengthening Financial Capability and Asset Building Competencies in Social Work Education in Uganda and Ghana

Abstract Narrative
“Background. Field education is a critical component of social work education as it provides students with real-world practice opportunities to develop skills and competencies to be effective social workers. This experience links students to prospective employers and offers many students their first professional opportunity to advance social justice for the most socially and economically vulnerable. Because most social workers in resource-constrained countries work to improve vulnerable households and communities’ economic resilience, the profession must equip workers with the necessary knowledge and skills to serve their constituents better. Now more than ever, it is important that social workers are well-positioned to support families economically ravaged by the COVID-19 pandemic and pushed further into poverty. Discussion. Our presentation will argue that the social work curriculum in sub-Saharan African countries should consider strengthening the integration of economic and financial perspectives into their training programs. This goal can be achieved in two folds: (a) ground students in financial capability and asset building (FCAB) theory and knowledge through classroom instruction and (b) strengthen the practical application of the classroom knowledge. In the presentation, we will provide case studies from Uganda and Ghana on practical ways to enhance the application of financial education. For instance, we will discuss strategies for resourcing field education units to provide relevant opportunities with financial institutions and non-governmental organizations focused on improving families’ financial well-being and economic development. We will also share strategies on training field educators, developing learning plans, and supervising students in the field. Conclusion. We anticipate that enhanced FCAB competencies (knowledge and skills) will significantly address the current FCAB practice gap, especially among social workers who comprise the primary frontline social service practitioners. Strengthening FCAB training through field education will prepare a cadre of professions well equipped to reach the most vulnerable. ”

Biography

Ms Goretti Masadde
Chief Executive Officer
The Uganda Institute Of Banking And Financial Services

The importance of financial awareness campaigns in advancing financial capabilities: Insights from Uganda’s Banking and Financial Services Awareness Month

Abstract Narrative

“Background. Most Ugandans have very poor financial capabilities. The state of affairs is not surprising as there is no dedicated training in Uganda’s education system or available to the general public to build people’s competencies in household financial and economic issues. The result is a population that is deficient in financial capability, regardless of demographic status. The effects of this were pronounced in early 2020 due to a myriad of crises: COVID-19 lockdown, locust evasion, and scattered floods across Uganda. The lockdown, in particular, cut off the daily source of income for many Ugandans, leading to a greater risk of a hand-to-mouth financial culture. A study by Financial Sector Deepening Uganda indicates that up to 43% of Ugandans can sustain their lifestyle for only one day without work; 19% for 15 days, 15% one month, and only 11% 2 months. Overall, 88% of Ugandans cannot sustain their lifestyle beyond 2 months without work. This trend does not differ much by poverty levels, urbanity, or region. When asked about their plan to ensure they have money in the future, 35% did not have, and at the same time, 55% are unable to come up with emergency funds. Regarding retirement, the National Social Security Funds states that only 5% of retirees achieve financial independence, which is scary for the employed that keep money with the institution over time, and national insurance uptake is only 1%. These facts show a dire personal financial management situation in the country. Discussion. This presentation will discuss Uganda’s ongoing efforts to address the financial capability challenges through a Banking and Financial Services Awareness Month. The presentation will focus specifically on insights from the Uganda Institute of Banking and Financial Services’ (UIBF) campaign dubbed Your Money Can, Be Money Smart, which ran from 10th November to 11th December 2020. The Campaign intended to educate the public about personal financial management and link them to providers of financial services and products. The presentation will discuss the Campaign structure, which covered six pillars of personal financial management: personal financial management, savings, loans, insurance, planning for retirement, and choosing appropriate financial products and services. The presentation also will share best practices from the week-long mass communication strategy, particularly two examples: (a) Campaign webinars that addressed questions for more clarity, (b) the setup and management of a financial literacy website portal—www.yourmoneycan.or.ug—to house relevant information for convenient reference, and (c) radio and billboard advertising for half of the Campaign. Conclusion. Nationwide financial awareness campaigns are central to significantly improving the financial capability deficits in Uganda and other countries. Similar campaigns in the health sector have succeeded in achieving greater awareness and behavior change, especially in the HIV/AIDS fight. Like most nationwide campaigns, financial capability campaigns require planning and adherence to best practices. Learnings from UIBF’s campaign during the Banking and Financial Services Awareness Month will offer a useful roadmap as Uganda and other countries ramp up efforts to bring financial knowledge and skills (financial literacy) and financial services and products (financial inclusion) to all populations. “