KEY CONSIDERATIONS

NATIONAL STRATEGIES AND REGULATION

LEVERAGE COORDINATION MECHANISMS TO ACCELERATE EFFORTS IN INCREASING THE FINANCIAL INCLUSION OF FDPs

Ideally, financial inclusion and forced displacement stakeholders should be engaged in coordination mechanisms that are designed to ensure FDPs’ needs are met during implementation of the NFIS. There is strong potential for crossover and coordination between the financial inclusion agenda and the forced displacement response. The forced displacement response, which includes both major humanitarian and development programming, reaches millions of forcibly displaced Afghans each year and it can be helpful for financial inclusion stakeholders to align with these.

The first step can be an introductory multi-stakeholder consultative workshop on the financial inclusion of FDPs, bringing the broad array of stakeholders together to exchange information, data, strategies and plans. This workshop can subsequently lead to an agreement on future collaboration and ways to leverage existing coordination mechanisms towards ensuring sustained concerted action in implementing policy change to advance FDP financial inclusion.

COLLECT AGE AND GENDER DISAGGREGATED FINANCIAL INCLUSION DATA ON FDPs TO INTEGRATE THEM INTO THE NFIS

There is currently a lack of age and gender disaggregated data on the state of financial inclusion of FDPs in Afghanistan. The collection and analysis of such data will enable the formulation of FDP-targeted evidence-based policies and priority actions that can be integrated into the NFIS.

INCLUDE THE VOICES OF FDPs

Too often, policies and programs for FDPs are formulated or developed without their inputs. This not only undermines the legitimacy of the policies and programs, but also their effectiveness since they lack the perspectives of FDPs. These perspectives can be sought through stakeholder consultations with local CSOs comprising FDPs, as well as institutions and organizations that work closely with FDPs such as the MoRR, INGOs and NGOs who can conduct FGDs with FDPs.

INVOLVE THE INFORMAL SECTOR INCLUDING THE HAWALA

The informal sector in Afghanistan is dominant. The hawala remains the avenue for many Afghans including FDPs, to access financial services including credit and remittances. DAB already works with the informal sector in outreach, knowledge dissemination and in regulatory efforts. Involving hawala stakeholders in the NFIS implementation will enhance measures to provide quality, affordable, transparent and sustainable financial services to FDPs.

IDENTIFICATION AND RELATED INTERNATIONAL STANDARDS ON AML/CFT

CONTINUE MEASURES TO IMPLEMENT THE NATIONAL RISK-BASED, TIERED KYC FRAMEWORK

DAB worked with the UN, the telecommunications regulator and the financial services and telecommunications sector in making KYC allowances for FDPs to access SIM cards and mobile money with UNHCR and IOM identification documents. DAB should continue to implement the national tiered-KYC framework and communicate it to regulated entities so that there is regulatory clarity. This will be especially helpful to apply simplified CDD among confirmed lower-risk women FDPs to access lower-tier formal financial services. These KYC and CDD processes can leverage the progressive digital developments in Afghanistan, including e-Tazkera and mobile money.

BRIDGING HUMANITARIAN RESPONSE AND DEVELOPMENT APPROACHES WITH DIGITIZED PAYMENTS

There is plenty of scope for increased coordination between financial inclusion stakeholders and those institutions working with FDPs, such as the MoRR, UNHCR, IOM, NGOs and FDP organizations. Coordinating with forced displacement stakeholders should lead to gains in financial access, especially considering the cash transfer and other large-scale displacement-related programming occurring across Afghanistan. The mobile money and finance technology sector are also

increasingly active in Afghanistan, with existing links between mobile money service providers and both the financial inclusion and displacement response

agendas.199 DAB is also pressing ahead with tiered-KYC regulatory reforms, intended to allow FDPs access to low-risk financial services.200