Despite Côte d’Ivoire's position as a regional leader in digital financial services (DFS), particularly in the use of mobile money, and supportive measures by its government, DFS in Côte d’Ivoire have not yet reached its potential. Reasons for this include the limited attractiveness of DFS offers to date, relatively high costs of service, cash preference and other “adoption” challenges, and regulatory constraints on which CGAP’s regulatory diagnostic on DFS focused.
Although the diagnostic focuses on the implications of DFS in Côte d’Ivoire, because Côte d’Ivoire is a member state of West African regional institutions, in particular the West African Economic and Monetary Union (WAEMU), challenges are often posed, and relevant policies adopted, at the regional level.
WAEMU’s central bank, BCEAO (Banque Centrale des Etats de l’Afrique de l’Ouest), exercises exclusive authority over the money supply and is the primary authority (with the participation of the regional Banking Commission) for the regulation and supervision of financial institutions, payment systems, and digital finance. The WAEMU Commission’s jurisdiction extends to activities that may have a potential impact on the regional market, for example, in competition regulation. Côte d’Ivoire, as a member country, retains legal authority in other areas that affect DFS, such as telecommunication regulation and general consumer protection.
Despite impressive strides over the past several years in building an enabling regulatory framework for financial inclusion and DFS, in particular, at the national and regional level, this effort poses the challenge of ensuring policy consistency and regulatory harmonization.
Constraints in the DFS market include broad policies that impinge on financial inclusion, notably (i) an interest rate cap that will affect the provision of digital credit going forward and (ii) a limit on the ability of microfinance institutions to move beyond savings and credit services into other activities that would involve e-money issuance. These and the following regulatory obstacles are addressed in this paper:
- E-money and payments
- Use of agents
- Customer identification
- Consumer protection
- Competition and coordination
This diagnostic provides an analysis of the regulatory framework for DFS in Côte d’Ivoire, including its coverage, its conducive features, and its gaps and obstacles. The paper also offers recommendations on how to address these issues in the context of Côte d’Ivoire DFS.