At a conference in Cape Town, South Africa, hosted by the Alliance of Financial Inclusion (AFI), a nonprofit Thailand-based network of financial policymakers aimed at increasing access to financial services, South African Finance Minister Pravin Gordhan announced that his country is considering the implementation of a “Twin Peaks” regulation system in an effort to foster financial inclusion, strengthen consumer protection, combat financial crime, promote financial education efforts and increase the accessibility of financial services. The policy would assign prudential regulation and supervision to one agency and market conduct regulation and supervision under another, with the Treasury retaining responsibility for overall policy implementation. Prudential regulation refers to legislation and regulations applying to financial institutions such as banks, securities firms and insurance companies to ensure that they are financially sound. Market conduct regulation focuses on protecting customers that buy financial products or otherwise entrust funds to financial institutions.
In 2004, South Africa had implemented the Financial Sector Charter, a policy that extended banking and financial services through the development of Mzansi bank accounts, which are targeted at low-income customers and are offered by five South African banks; Absa Group Limited, First National Bank (FNB), Nedcor, Standard Bank and Postbank. Each sets its own pricing for its Mzansi accounts. The percentage of adult South Africans with access to financial services rose from 47 percent in 2008 to 63 percent in 2011.
By Jennifer Young, Research Associate
About Alliance for Financial Inclusion
The Alliance for Financial Inclusion (AFI) is a Thailand-based network of financial policymakers from developing and emerging economies. AFI aims to increase access to financial services for poor people using a “peer-to-peer” model intended to facilitate member institutions in sharing knowledge and identifying policy solutions appropriate for their countries. AFI also provides grants to members to support policy implementation. As of 2011, AFI reports having member institutions representing approximately 70 countries. The size of AFI’s budget is unavailable.
Sources and Additional Resources
Business Day Live Story:
http://www.bdlive.co.za/economy/2012/09/27/gordhan-sees-better-financial-regulation-in-18-months
MicroCapital Story: “MICROCAPITAL BRIEF: At AFI Global Policy Forum, Bangladesh Bank Governor Endorses Financial Inclusion to Boost GDP,” October 9, 2012.
https://www.microcapital.org/microcapital-brief-at-afi-global-policy-forum-bangladesh-bank-governor-endorses-financial-inclusion-to-boost-gdp/
MicroCapital Story: “MICROCAPITAL BRIEF: FinMark Trust’s Annual FinScope South Africa Survey: Financial Inclusion Down from 77% to 73%,” December 20, 2011.
https://www.microcapital.org/microcapital-brief-finmark-trusts-annual-finscope-south-africa-survey-financial-inclusion-down-from-77-to-73/
MicroCapital Story: “MICROCAPITAL BRIEF: Standard Bank: Majority of Africans Lack Access to Microfinance, Other Financial Services,” November 1, 2011.
https://www.microcapital.org/microcapital-brief-standard-bank-majority-of-africans-lack-access-to-microfinance-other-financial-services/#more-15456
MicroCapital Universe Profile: Alliance for Financial Inclusion
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Alliance+For+Financial+Inclusion
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