Discussion Paper: Expanding Financial Inclusion

Purpose

This discussion paper is intended to stimulate dialogue among member banks, the Central Bank of The Gambia, government, development partners and community organisations on how access to and use of formal financial services can be widened. Unlike a position paper, it does not set out settled industry positions. It identifies the main issues and poses questions on which the Association invites views.

What financial inclusion means

Financial inclusion is more than the opening of an account. It means that individuals and businesses have access to useful and affordable financial products, including payments, savings, credit and insurance, delivered responsibly and sustainably, and that they actually use them to manage their households and enterprises. An account that is opened and never used does little for its holder.

Barriers to inclusion

Distance

Physical access. Branches are costly to build and operate, and are naturally concentrated where population and economic activity are densest. Customers in rural areas may face long journeys and travel costs to reach a branch, which discourages regular use.

Documentation

Identification and proof of address. Customer due diligence is an essential safeguard against financial crime. However, where it depends on documents that some people do not hold, such as formal proof of address, it can exclude legitimate customers.

Cost

Fees and minimum balances. Account fees, minimum balance requirements and transaction charges may be modest in absolute terms but significant for people on low or irregular incomes.

Literacy

Financial and digital capability. Some potential customers are unfamiliar with how bank products work, how to compare them or how to use digital channels safely. This limits uptake and increases vulnerability to fraud.

Trust

Confidence in institutions. People are unlikely to entrust their savings to institutions they do not understand or that seem distant from them. Trust is built through clear information, fair treatment and the effective handling of complaints.

Levers for change

Agent banking

Agents, such as shops, pharmacies and other established local businesses acting on behalf of a bank, can provide cash deposits and withdrawals, support for account opening and bill payments closer to where people live and work. Effective agent networks require sound liquidity management, agent training, clear customer-protection rules and appropriate oversight, in line with the Central Bank's requirements.

Digital onboarding with proportionate KYC

A risk-based approach to customer due diligence, consistent with the Anti-Money Laundering and Combating of Terrorist Financing Act 2012 and international standards, allows simplified measures for lower-risk products, such as basic accounts with limits on balances and transactions, while enhanced measures are applied where risk is higher. Combined with reliable national identification and digital verification, this can make onboarding faster and more accessible without weakening the integrity of the financial system.

Products designed for underserved groups

• Women: products and outreach that reflect women's patterns of saving and enterprise, including group-based savings and credit, and flexible approaches to collateral.
• Youth: low-cost accounts with simple features, linked to financial education and to the transition from school to work.
• Small and medium-sized enterprises: accounts, payment acceptance and working-capital products suited to irregular cash flows, together with guidance on record-keeping.
• Rural and agricultural customers: savings and credit products aligned with seasonal income.

Financial literacy

Financial literacy helps customers choose suitable products, use them safely and avoid over-indebtedness. It is most effective when it is delivered at the points where people make financial decisions, in local languages and through trusted messengers, and when it is sustained over time rather than delivered once.

Questions for discussion

1. Which barriers are most significant for different groups, and how could the industry measure progress in addressing them?
2. What conditions would make agent banking commercially sustainable and safe for customers in less populated areas?
3. How can simplified due diligence for lower-risk products be applied consistently across institutions?
4. What role should shared infrastructure, such as interoperable payments and national identification, play in reducing costs?
5. How can banks, government and community organisations coordinate financial-literacy efforts to avoid duplication?
6. What data would best help policymakers and the industry to understand who remains excluded, and why?

Next steps

The Financial Inclusion & Consumer Protection Committee will gather responses to this paper from member banks and stakeholders and will consider whether any matters should be developed into a formal industry position. Comments may be submitted to the Secretariat.