Opening Speech by Ms Caroline Abel, Governor of Central Bank of
the Alliance for Financial Inclusion's 13th
Seychelles at Consumer
Empowerment and Market Conduct and 8th SME Finance Working
Group Meetings
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March 13 17, 2017
Venue: Savoy Resort and Spa
Honourable Ministers, Dr Peter Larose and Mr Wallace Cosgrow,
Dr. Alfred Hannig, the Alliance for Financial Inclusion Executive Director,
Distinguished Guests,
Colleagues,
Ladies and Gentlemen,
Good morning and thank you everyone for being here today. On behalf
of the Central Bank of Seychelles, I am very pleased to welcome you all
to the 8th SME Finance and 13th Consumer Empowerment and Market
Conduct Working Group Meetings and the Public-Private Dialogue
Training on Small Merchants. It is indeed our pleasure to co-host an AFI
event for the first time in Seychelles.
For those of you not familiar with Seychelles, we are a group of 115
islands with a land area of 456 sq. km and 1.2 m sq. km of sea. We have
a population of 93,000 with a diverse ethnicity which underscores our
official languages of Creole, English and French. About half of the area
of Seychelles is protected which consists of national parks, including two
World Heritage Sites as declared by UNESCO: namely the atoll of Aldabra
which is home to giant tortoises and the famous botanical garden of the
Vallée de Mai on Praslin which has the native Coco de Mer, the largest
seed in the world. Given the unique biodiversity of Seychelles, the Central
Bank showcased this fact through the new family of banknotes and coins
last year, which is Seychelles' Unique
which was unveiled in December
-
Biodiversity the Backbone of Our Economy. The new banknotes and
coins represent the Seychelles' endemic flora and fauna.
We face the
limitations and constraints typical of Small Island States that have few
inhabitants and limited natural resources. We are a developing economy
that is heavily dependent upon tourism and fisheries and the financial
services sector is currently the third pillar of the economy.
With that said, I would like to proceed with providing a brief background
the Seychelles'
on the initiatives undertaken by the authorities to develop
financial sector. Seychelles has made significant progress since 2008 in
actively reforming its financial sector. In late 2008, we embarked on a
macro-economic reform program with the support of the IMF that provided
the platform for fundamental changes in the country's economic and
financial landscape of which the establishment of a modern payment
system was seen to be a key component. Since then, a number of
milestones have been achieved including:
-
The introduction of the Central Bank of Seychelles Immediate
Transfer Service (CBSITS) creating an interbank platform for
effecting payment transactions.
- The establishment of an Electronic Cheque Clearing (ECC) system
allowing for a same day cheque clearing process via the electronic
exchange of cheque images.
- The Seychelles Electronic Funds Transfer (SEFT) as an alternative
means for interbank funds transfer.
- The introduction of the first Securities Exchange.
- The licensing of the first payment service provider to offer mobile
payment services.
- The implementation of the electronic payment gateway for the
payment of Government services.
-
Commissioning of a number of feasibility/diagnostic studies in
respect to Government payments, remittance market, the
implementation of a Central Securities Depository and that of a Real
Time Gross Settlement System.
Albeit, all the progress made, there are still important milestones that
remain to be achieved in order to further develop the financial sector,
especially where adoption of innovative payment systems and consumer
empowerment are concerned. In this context, the Cabinet of Ministers
approved the Financial Sector Development Implementation Plan in
November, 2014. The Plan serves to provide the Government and all
stakeholders with a clear guidance in key policy areas for financial sector
development. It is a nation-wide document detailing the strategies of the
Seychelles Government to strengthen and deepen the financial sector
with the ultimate objective of enhancing the country's economic
development. The key strategic objectives are:
- Strengthening the financial sector's legal and regulatory
framework.
-
Developing the national payment system and other relevant
financial infrastructures.
- Improving access to credit of small and medium enterprises.
-
Strengthening the regulation and supervision of non-bank financial
institutions.
-
Developing the capital markets.
- Other relevant cross cutting issues such as consumer protection,
financial literacy and financial inclusion.
As part of the output of the Plan, a financial literacy baseline survey was
commissioned last year with the aim of gauging the level of financial
literacy of the population and provide an assessment of its needs,
including the identification of possible target groups. The survey was the
first of its kind to be conducted in the country and will be a crucial element
in the drafting of a national strategy for financial education. Similarly, a
survey was also completed last year under the SME Development project.
The survey had as objective to provide disaggregated data about SMEs
that will be used to review SMEs development issues across various
population segments and training needs. As a result, the following were
identified as challenges that inhibit SMEs from access to markets:
-
Where markets are present, the site are not serviced with necessary
social amenities.
-
SMEs lack market information and marketing skills.
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Lack of adequate local markets.
-
Inadequate, inefficient and ineffective distribution and supply
network in the local market, such that products/service takes time
before reaching target markets.
- Limited capacity to meet SME expectations in terms of providing
finance as well as providing non-financial support.
- Entrepreneurship skills training into both practical and non-practical
sector specific training in order to achieve relevancy to the needs of
the small business community.
As you may all be aware, SMEs play critical role in the country's economic
development. SMEs are often considered as the drive to creating local
demand and consumption. In fact, SMEs related matters are high priorities
on the government agenda. On that note, the Central Bank in
coordination with government is closely working with the commercial
banks in light of the risks associated with SME finance, to come up with a
strategy for SME lending.
The Central Bank is also currently engaged in exploring the feasibility to
expand participation in the Credit Information System (CIS) to all lenders
not regulated by the Central Bank, including government lending agencies
or programs and commercial firms that engage in hire-purchase activities.
In this regard work is being undertaken with the World Bank to enact a
Credit Information System law which would broaden the scope of the CIS
in Seychelles to include other entities and activities that are not regulated
by the Central Bank. Furthermore, with the aim of modernising the
national payment system, by broadening the scope of innovative
payments schemes and reducing paper instruments as a means for
payment, the Central Bank in collaboration with the Seychelles Banking
Association are looking into the possibility of implementing a national
payment switch.
Ladies and gentlemen, with no doubt, services provided by the financial
system has a prime impact on economic growth. The level of
development plays a significant role in the growth of businesses,
enhancing innovation and competition. It is however, equally important
that in support of the broader objective of financial sector development
and financial inclusion, access to financial services are of the highest
quality and convenience, affordable and also operated in an environment
where consumers are adequately protected. Ensuring that there is an
effective consumer protection framework to address the balance of power
between financial institutions and their consumers is vital in order to
enhance public confidence in the financial system and the use of
innovative financial services.
There is no need for me to overemphasise that consumer education,
consumer empowerment is fundamental across all levels. Financially
literate and empowered consumers interact more effectively and
assertively with financial services providers, ultimately leading to them
attaining their financial objectives. Essentially, consumer empowerment
is instrumental in supporting financial inclusion policies. Now, whilst it is
important for consumers to assume the responsibility of acquiring the
necessary financial knowledge and skills, it is important to reiterate that
authorities and financial institutions should devote resources and work
towards establishing mechanisms that support financial consumer
empowerment.
Lastly, I would like to take this opportunity to thank AFI for organising such
forums as they provide us, policy makers with the opportunities to
exchange experiences on the different policy decisions taken in our own
jurisdictions. Years ago, productivity was attributed to those who retained
the most knowledge. Today, however, productivity and efficiency is
attributed to combining expertise with the experience and intelligence of
peers discharging similar functions. Let us continue to learn from each
and showcase the results that our forum, the Alliance for Financial
Inclusion can bring to the world stage. We in Seychelles, we are very
fortunate to have you on our shores at this present time as the subject
matters on the agenda are very pertinent to our country. I encourage my
colleagues from the Central Bank and the two respective government
Ministries to have maximum participation and interaction.
Ladies and gentlemen, I would like to thank you for your attention and I
wish you all fruitful deliberations over the course of the coming days and
to our foreign guests an enjoyable stay in Seychelles.
Thank you.