Cabinet approves implementation of National Financial Inclusion Strategy

• Aims to provide opportunities for all citizens to access financial service including savings, loans, insurance and pensions
• Strategy prepared by CBSL with relevant stakeholders
• Proposals for regulators, banks and finance and insurance companies to improve accessibility to all
• MSMEs, low-income households, youth and women among groups with limited or no access to formal financial sector

By Chandani Kirinde

Cabinet this week gave approval for the implementation of Sri Lanka’s National Financial Inclusion Strategy to provide opportunities for all citizens to access all payments, savings, loans and insurance as well as financial tools such as pensions.

The strategy has been prepared by the Central Bank of Sri Lanka (CBSL) with contributions by the relevant stakeholders, Cabinet Spokesman Minister Bandula Gunawardena said.

The measures to enhance financial inclusion for regulators will include developing and implementing the strategy to coordinate efforts with major stakeholders from the Government, financial industry and civil society, while introducing grants and risk-sharing facilities to support sustainable start-ups.

Other measures will include coordinating with Government departments to provide technical assistance for green project development and investor pitches and support for fintech companies and the development of digital tools, providing them with a regulatory sandbox to test fintech solutions towards financial inclusion.

For banks and finance companies, the strategy seeks to develop more accessible, affordable and efficient financial products and services tailored for individual and communities that traditionally have had limited or no access to financial services and  improve access to essential financial products and services.

For insurance companies, the strategy encourages developing of accessible, affordable and effective insurance products tailored to low-income households and MSMEs to offer protection against climate change and natural disasters.

The Minister said Sri Lanka had made considerable progress in financial inclusion as there was a high level of physical access to financial institutions with more branches opening up in rural areas but challenges remained in increasing financial literacy and financial awareness to enable clients to use financial services effectively and in improving payments and settlement systems.

Micro, Small and Medium Enterprises (MSMEs), low-income households, youth and women are among the groups with limited or no access to the formal financial sector.

The proposal to implement the strategy was presented to Cabinet by Prime Minister Mahinda Rajapaksa who is also the Minister of Finance.