CGAP and Côte d’Ivoire’s Ministry of Economy and Finance Host Roundtable
UNSGSA Queen Máxima participates in the roundtable on financial consumer protection
Abidjan, Côte d’Ivoire – June 13, 2022. The Consultative Group to Assist the Poor (CGAP) and Côte d’Ivoire’s Ministry of Economy and Finance today hosted a roundtable on financial consumer protection in Côte d’Ivoire in light of rapid developments of digital financial services (DFS) in the region and associated financial consumer risks. Her Majesty Queen Máxima of the Netherlands, the United Nations Secretary-General's Special Advocate for Inclusive Finance for Development (UNSGSA), who is conducting country visits in Côte d'Ivoire and Senegal between 13 to 16 June to advance financial inclusion, participated in the roundtable and delivered remarks. Other participants included members of Cote d’Ivoire’s cabinet and financial inclusion and consumer protection organizations, regional regulators and financial service providers.
Côte d’Ivoire has seen strong growth of mobile money, which has created new economic opportunities on an unprecedented and notable scale, and the country is increasingly embracing DFS to unlock additional financial inclusion benefits for consumers. However, DFS also exacerbate existing risks for consumers, according to CGAP’s global research, and continue to introduce new and ever-evolving risks—some outgrowing consumer adoption rates.
During the roundtable, CGAP presented findings from two national surveys conducted with Horus Consulting and in collaboration with the Observatoire de la Qualite des Services Financiers of Côte d’Ivoire (OQSF-CI) on consumer risks in digital finance and digital credit. The surveys*, which used a nationally representative sample, finds that over the past 12 months, some risks—such as fraud and lack of transparency—are affecting many mobile users in Côte D’Ivoire. Main highlights from the surveys:
- 61% of mobile money users faced network downtime, 33% lacked information on costs, and 28% were subject to fraud
- 78% of the respondents made late repayments on their digital credit products
- Women are more likely to lose money to scams (16% of women compared with 12% of men), have more difficulty navigating the menu of the digital finance offering through their phones (25% of women compared with 17%) and understanding the financial products (22% of women compared with 18% of men)
According to UNSGSA Queen Máxima, the responsible, affordable and safe offering of DFS is essential to building better futures for citizens through financial inclusion, but we are now at a crossroads. With digital finance expanding rapidly and creating lots of opportunities, the scale of consumers risks merits significant attention and prompt actions. To make progress in this area, it is important to take a holistic approach to consumer protection that emphasizes the role of different authorities and providers of DFS with consumers in mind.
CGAP recommends that the task of addressing financial consumer risk is a task that should not be handled by any one actor in the digital finance ecosystem. Collaboration among all actors in addition to enhanced technical capacity and a strong focus on the consumer experience are three key conditions for responsible use of digital finance, especially among women and vulnerable segments who often have low digital literacy.
“The use of DFS in Côte d'Ivoire offers an important opportunity for the economic and social development of the country,” said Sophie Sirtaine, CGAP CEO, at the roundtable. “Enabling financially excluded people to take part in the digital economy allows them to better seize economic opportunities that improve livelihoods, access essential services such as energy or water, and better prepare for external shocks including those caused by climate change. At the same time, we recognize that DFS come with risks that can undermine these benefits and erode consumer trust in DFS. We believe many solutions can reduce these consumer risks to ensure positive consumer outcomes in DFS, such as market monitoring tools and working as a collective with all actors in the financial ecosystem to understand, manage and mitigate these risks.”
As part of a wider effort to advance financial consumer protection through a collaborative effort with strategic partners, CGAP launched a DFS Consumer Protection Lab in the West African Economic and Monetary Union (WAEMU) to engage all players in the digital finance ecosystem, including regulators, supervisors, users, consumer associations, financial service providers and support and research organizations.
In addition to the roundtable, CGAP, the Agency for the Promotion of Financial Inclusion (APIF) and OQSF-CI are organizing a workshop on Tuesday, June 14 for a wider network of stakeholders from the digital finance ecosystem in Côte d’Ivoire—including both public and private actors. The workshop aims to foster a structured discussion on solutions for effective management of DFS risks.
*Note: The full survey findings will be available in September 2022.
CGAP is a global partnership of more than 30 leading development organizations that works to advance the lives of poor people, especially women, through financial inclusion. Using action-oriented research, we test, learn and share knowledge intended to help build inclusive and responsible financial systems that enable poor people to capture economic opportunities, access essential services, and build resilience, including in the context of climate change. We research and experiment to establish proofs of concept and extract actionable insights that help our partners implement solutions in the marketplace and take them to scale. In short, we influence through evidence. By doing so, we hope to advance broader development goals and contribute to more prosperous, equal, resilient, sustainable economies and societies.