Financial Sector Policy
Financial Sector Policy
The increased prominence of Financial Sector Policy in recent years reflects the greater general awareness of the role of finance in the processes of economic development and poverty alleviation. This strong emphasis placed on finance is also strongly influenced by the ripple effects of the financial crises of the late 1990s.
Skills
The Financial Sector Policy team of staff and associates has a strong background in the design of broad-based reform for financial sectors in developing and transition countries. At the sectoral level this skill-base encompasses cross-linkages within the financial sector and between finance and macro-economic performance, including fiscal outcomes. At the institutional level, OPM has considerable experience in diagnostic studies leading to recommendations as well as action on the reform of a range of financial intermediaries from commercial banks to development finance institutions that carry the mandate to sustainably reach markets that are otherwise left un-served by mainstream financial institutions. The team includes specialists with specific experience in commercial banks, central banks, capital markets, savings banks and microfinance as well as in macroeconomic management. The team’s work is increasingly focused on issues of access to financial services for poor households and micro, small and medium enterprises (MSMEs).
Recent work
This has included:
A review of the state of rural financial services in Tanzania and the design of a strategy and action plan to enhance financial access in the rural areas.
A study of the supply of financial services to the poor and MSMEs in Zambia, resulting in recommendations on action to overcome the barriers to access and expand the supply of credit and other financial services to the private sector.
Measurement of the social dividend in the activities of commercial and savings banks, as commissioned by the World Savings Banks Institute, covering case studies in Sri Lanka, Uganda, Colombia, Spain, France and Germany.
Advice on the appropriate legal and regulatory framework for the South African Post Bank following a review of the experience made by other postal savings banks in the world.
A multi-country study of supplier practices and regulatory issues relating to the remote delivery of financial services, including mobile phone banking and agency services. This study has been used as the basis of recommendations on models suitable for use in South Africa, Mozambique and Botswana.
Recommendations to accelerate the development of access to finance for MSMEs in Armenia and of strategies for broad private sector development in two poorer regions of that country.
The preparation of a major Financial Sector Modernization and Information System Project designed to restructure the State Bank of Vietnam as a modern central bank and to introduce appropriate Management Information Systems into the State Bank, Deposit Insurance of Vietnam and the Credit Information Centre.
The development, in conjunction with FinMark Trust and the Witwatesrand University Business School, of case studies focusing on the methods that are being successfully employed by formal financial institutions in Africa to extend access to financial services to households and MSMEs.
A Poverty and Social Impact Assessment of Microfinance Policies in Pakistan focused on an assessment of the quality and extent of access by poor households and microenterprises to financial services, including credit, savings, remittance and transaction services.
Advisory work for the Financial Sector Deepening Trust of Tanzania on a review of its strategy for broadening and deepening the financial sector in that country, and on the design of a monitoring and evaluation system for the Trust.
Advising donors in areas of conflict such as Somalia and the West Bank and Gaza on issues relating to access to finance.
The development of broad-based financial sector strategies for the governments of Kenya and Serbia.
The development of a master plan for the technical assistance required for the reform of the banking sector in Vietnam.
The preparation of a sector wide analysis of the Ukrainian financial sector and the formulation of an integrated set of proposals for deepening the existing reform agenda.
The deepening of the securities market in Vietnam.
Work Areas
The advisory and research work that OPM is able to undertake includes:
The design and management of sector wide strategies for the financial sector in developing and transition countries
The analysis of access to financial services and the formulation of policies to improve access, particularly in the context of poverty reduction strategies
Specific assessments of financial soundness and efficiency (of individual financial institutions or overall financial systems) and the identification of those factors that can contribute to financial instability and ineffective financial sector performance in particular countries
The analysis of particular banks and other financial institutions such as development agencies and savings banks in the public sector, including the regulatory regimes most appropriate to such institutions
The assessment of the design and performance of the supporting agencies of the financial sector such as deposit insurance agencies, credit bureaus and regulatory authorities
The design and management of strategies for strengthening and deepening capital markets