Promoting Diverse Financial Sectors in the Seychelles: Interview with Ms. Caroline Abel, Governor of the Central Bank of Seychelles

Through five technical assistance projects, FIRST and the World Bank Group have worked with the Central Bank of the Seychelles to prioritize and implement several financial sector reforms. Since 2010, FIRST has been committed to promoting diverse financial sectors within the island nation, and has collaborated with the central bank on projects in several areas, including Insurance, Housing Finance, Secured Transactions, and Banking.

The Financial Sector Development Implementation Plan (FSDIP) also enabled the Central Bank to adopt a coherent vision and strategy for financial sector development, and included a prioritized roadmap for implementing reforms.

Ms. Caroline Abel, Governor of the Central Bank of Seychelles, shared some of her experiences collaborating with FIRST, the process through which the country has begun to expand financial inclusion, and some key lessons implementing financial sector reforms. (Interview Date: April 19, 2015)

Q1: How would you describe your experience with FIRST? 

The experience with FIRST has been excellent. Recently, we’ve had the support for the Financial Sector Development Implementation Plan (FSDIP), which has quite a number of components.

 So, we are very happy with the support and financial assistance in the process. Because to put significant projects in place, funding sometimes becomes a critical element, particularly for a small country like Seychelles, which has limited resources. 

So, we are very gratified with the continuous support that we’ve received from the FIRST Initiative. 

Q2: What challenges did the Seychelles face in developing its Financial Sectors? 

In terms of the Financial Sector Plan (FSDIP) itself, what we wanted was a clear roadmap of how we could improve the sector. Through our internal assessment and given interest in the financial sector of the Seychelles, we found that there were quite a bit of gaps that we needed to close, to make sure that the sector becomes efficient. 

When we approached the FIRST Initiative, they were eager to support us in that process. What has come out of that process is we have seen that the Regulatory Framework needs to be enhanced. We need to put a significant emphasis on Consumer Protection. [We need to] see how we can support the Small and Medium Enterprises (SMEs), particularly on the access for credit. We’ve had support in looking at the Housing Finance.

So, we have managed in that process [to have] the experts and the stakeholders work together. Rather than the government and other authorities [developing the framework] in isolation of the market, and then the market feeling that the project is being imposed on them. 

When they have participated, you see greater cooperation and the eagerness of the stakeholders to make sure that we see success coming from the plan. 

Q3: What were the challenges that the Secured Transactions and Collateral Registry project hoped to address? 

I think one aspect was to centralize the process of our Collateral Registry. So, we wanted something that was more efficient and something that the public at large could access at any time to process. 

As part of the Doing Business Report that comes out every year, [Collateral Registry] had been an important component that pulls us down in the rankings. Everybody realized that it was something that we have to push hard. 

Q4: How do these projects relate to your broader Financial Inclusion agenda? 

Actually on the question of Financial Inclusion in Seychelles, we had not looked at it from a broader perspective. But once we began going through this process of not just the Secured Lending framework, but also, components of the Financial Sector Development Plan, we found that Financial Inclusion is now becoming an important element, particularly when you look at the component of Consumer Protection. 

It’s a good opportunity for us explore this issue of Financial Inclusion in greater depth, and we’ve already realized that we will have it as a greater component of the plan going forward. 

 Q5: What are the key lessons you’d share on how to implement Financial Sector reforms? 

I think for us the main lesson that we have seen is that you must have an understanding with all stakeholders. 

It’s not just one part in the system that looks at Financial Sector development. It’s everybody, including the private sector. 

So to have that drive, you must get everybody on the table for the same goal. So, I think that good interaction, and involving the market players is very important to achieve a successful implementation, because then everything is smooth.