Financial Inclusion Strategy in Paraguay
Project Development Objective (PDO)
The main objective of this project is to help the Central Bank of Paraguay design a comprehensive strategy for financial inclusion. The resulting reforms are expected to help the unserved and underserved portions of the population gain access to financial services and improve their lives.
The Central Bank of Paraguay has asked for support from the FIRST Initiative to (a) provide policy advice and technical assistance to develop the National Strategy for Financial Inclusion (NSFI) and (b) support the initial stages of implementation to set the national direction, vision, and mission of enhancing financial inclusion for the wider population in Paraguay. The NSFI aims to enhance synergy among individual initiatives, to have better sequences among these on-going or pipeline initiatives (connection of individual initiatives, impact assessment, and quality control of initiatives to make financial inclusion sustainable), and to support the start of the NSFI implementation process.
The NSFI will be designed, implemented, and governed by a financial inclusion committee, comprising representatives from the Ministry of Finance, Central Bank, Instituto Nacional de Cooperativismo (National Institute of Cooperatives), and the Planning Secretary of the Presidency (Secretaría Técnica de Planificación del Desarrollo Económico y Social). The committee will have a clear mandate supported by a national decree and will include the advice of key stakeholders’ to formulate the strategy and ensure the financial inclusion is sustainable beyond the delivery of the NSFI in Paraguay.
The overall project activities will progress in two stages:
1. Development of the strategy
Develop a solid governance structure among key stakeholders and lead the coordination among key stakeholders and the implementation and monitoring of the NSFI. In addition, the project team is conducting regulatory reviews on key laws and regulations to identify bottlenecks in improving the enabling regulatory environment to enhance financial inclusion. This effort includes an analysis of the supply and demand of financial services to determine the available financial services and products offered to financial clients.
The NSFI will consist of three analytical components: demand-side analysis, supply-side analysis, and a legal and regulatory framework review. In accordance with the gap analysis, the NSFI will be drafted to include the actions needed to increase financial inclusion and a road map for implementation. As part of drafting the NSFI, the project team is developing the monitoring and evaluation framework to measure progress and effectiveness. This includes identifying key performance indicators and developing the relevant authorities’ capacity for monitoring and evaluation.
2. Dissemination of the strategy
Review and discuss the draft strategy with stakeholders through the use of workshops to solicit input as well as raise public awareness regarding the NSFI.
The expected outcomes of the project are as follows:
1. Implementing the reforms proposed in the financial inclusion strategy for improved access to
finance, thereby helping poor people reduce poverty
2. Improving coordination among key stakeholders
3. Creating a financial inclusion committee to lead the coordination work
4. Achieving buy-in and consensus from all relevant authorities and stakeholders as a result of the
consultation and dissemination events
5. Forming working groups to further advocate for reforms