‘ rules of the game ’ must not create barriers to growth for fintechs. we have identified a few scenarios where this may be the case. authorities have to ensure that the approach to, and governance of such processes, is transparent and robust. access to resources two significant resource challenges facing fintechs are access to capital and access to skills sets. unlike incumbents who generally have reasonable access to finance, fintech firms and specifically fintech smmes may experience significant additional challenges accessing finance. while consumer credit is likely well - served in south africa, smmes page 5 of 9 continue to struggle to access critical funding to sustain themselves and even grow. this is despite the significant contribution that these businesses make to gross domestic product ( gdp ) and employment. the inability of smmes to raise funds is caused by a number of demand - and supplyside factors, such as the lack of financial records and the inability of lenders to tailor their loan terms to match the business needs. according to a 2019 report by one of the large banks in south africa, few fintechs manage to secure start - up capital, with the general sentiment indicating that funding seems to be readily, but not openly, available. more broadly speaking, smmes also operate in a mostly informal, invisible and cash - based economy. addressing this challenge is related to the broader need to digitise these businesses and ensure that they are included in the digital economy. turning our attention to the importance of access to skills : although much emphasis is placed on the technologies in the fintech domain, it is the people, the skills and the talent that create the innovation and propel the change. this is evidenced across the fintech value chain : from the data scientists who unearth customer behaviour patterns, needs and ‘ pain points ’, through the software developers and engineers who develop the solutions, to the business heads who craft growth strategies based on an emerging technology. however, similarly to most countries, particularly developing countries, south africa has a shortage of technical skills. the 2019 south african information, technology and communication ( ict ) 7 skills survey found that the fourth industrial revolution ( 4ir ) has not had a significant impact on the south african ict skills landscape yet. according to the report, the skills associated with the current set of emerging technologies – such as ai, the internet of things, blockchain, automation, data science and programming – were the scarcest. 8 this leads to a race for talented and skilled individuals such as data

financial system remains sound. same challenge, new tools again, as in many oecd countries, at the outset of the covid - 19 pandemic new zealand ’ s nominal interest rates were approaching an effective lower bound. globally, as inflation and inflation expectations have declined, so have nominal interest rates. we were forward looking enough during 2019 to initiate thinking on what alternative monetary policy tools are available for us if we could no longer rely purely on the official cash rate ( ocr ) to deliver our policy goals. 7 our work assessed the merits of various tools for achieving our monetary policy goals against principles of effectiveness, efficiency, operational capability, 7 see : about alternative monetary policy tools, rbnz, https : / / www. rbnz. govt. nz / monetary - policy / alternative - monetary - policy / alternative - monetary - policy - tools # fn1 page 7 of 17 and government balance sheet stability. 8 what we didn ’ t realise at the time is how quickly we would need to use this playbook. and, as in many other oecd countries, we ended up with two jobs to do simultaneously : building and operating new monetary policy tools to achieve our desired monetary conditions. this multi - tasking has proved more of a communication challenge than an engineering one. we were quick to lower the ocr to 0. 25 per cent and commit publicly that it would remain at this level for at least a year. however, we also committed our local banks to ensuring they would be operationally ready to manage negative wholesale interest rates by the end of this period. we wanted to provide some immediate certainty to the public about the path of the ocr while also creating future policy optionality – the right but not the obligation to implement a negative ocr if future conditions necessitated this. we remain true to these commitments. we subsequently implemented a large scale asset purchase ( lsap ) programme aimed at lowering and flattening the new zealand wholesale interest rate curve. the purpose of this was to drive retail interest rates lower, to be consistent with our dual monetary policy mandate. this action has proved effective ( figure 8 ). figure 8 : change in new zealand interest rates ( change since beginning of 2020 ) source : bloomberg, interest. co. nz, rbnz note : data for business loans reflects the change in the average interest rate on outstanding business loans. other rates are based on advertised and market rates we have more recently moved to supplement the lsap programme with a funding