20
BRINGING THE INFORMAL SECTOR ONBOARD
ENSURE MULTI-STAKEHOLDER COORDINATION
CONCLUSIONS AND RECOMMENDATIONS Based on the shared experiences and lessons from a diverse set of countries presented in this Guideline Note, a range of policy areas and measures were identified at the intersection of the informal sector and financial inclusion: from the latest in digital advancements tailored to the informal sector to multiple examples of the coordination required to link up work across priority areas.
Coordinating across different government arms such as ministries, legislatures, and regulatory bodies is key to coherent policymaking. Financial policymakers and regulators have a critical role to play given the importance of financial access to the informal sector. Along with this cross-government coordination, a “big tent” approach should include relevant organizations with strong links to the informal sector, including unions, associations, women’s groups, and youth groups. Successful collaborations across various countries on IDs, women and youth involvement, digital commerce, mobile money, and regulations demonstrate the possibilities when policies on financial inclusion and the informal sector are coordinated and harmonized.
KEEP INFORMAL SECTOR DYNAMICS CENTRAL TO DESIGN AND REGULATION OF FINANCIAL SERVICES Those working in the informal sector, particularly women and the youth, face unique challenges when it comes to accessing different types of financial services. This includes the widespread lack of identification documentation, mismatched hours, and distance to formal financial service providers, as well as less tangible factors such as feelings of social marginalization. The success of tiered KYC regulations, simplified accounts programs such as in the Philippines, the Bankita program in Angola, mobile money in Mozambique, and YouSave micro pensions in the Solomon Islands show the major gains that can be made when financial services are tailored directly to the informal sector workers and MSMEs.
INCLUDE DIVERSE POPULATION SUB-GROUPS AND WOMEN IN FINANCIAL INCLUSION AND INFORMAL SECTOR POLICIES AND PROGRAMS Diverse population sub-groups and understanding women’s experience amplifies the unique issues in relation to informality and financial inclusion. Policies and programs targeting the informal sector must address these differentiated challenges. This includes ensuring that women and sub-groups, such as ethnic minorities, people living in displacement, and people living with a disability are meaningfully engaged at different policy levels, have a seat at the table through the government agencies, associations and NGOs that represent them, and that special needs and vulnerabilities inform policy and programming. A transformative approach to policymaking should be adopted to enhance the decision-making power of these groups, strengthen positive norms, and aim to change the underlying structures that perpetuate gender inequalities in informality and financial access.
