BERNE, 5 NOVEMBER 2014

Clifford Nkomo : Head Postal Services

1. BACKGROUND

2. CURRENT SITUATION

3. REGULATORY CHALLENGES

4. OPPORTUNITIES

5. RECOMMENDATIONS

6. SADC POLICY RESOLUTIONS

Governments in the Southern Africa Development Community (SADC), as

elsewhere in the world, are pursuing financial inclusion as an enabler for

socio economic development and reduction of poverty.

The post office with an existing wide branch foot print offers a viable

avenue (cost and security) for the role out of financial services to the poor,

unbanked, disadvantaged low income groups especially in the rural areas.

There are over 5600 post offices spread across the 13 SADC countries with

a postal density ratio of 1:38600, representing the largest single branch

network of any kind.

Due to the decline in mail volumes, the post office has sought new revenue

streams through offering diversified financial services through partnerships

with banking and non- banking institutions including mobile money

operators.

In SADC region average mobile telephony penetration is around 80% with

network coverage of 90% of the population making this the most potent

tool for financial inclusion.

Only about 42% of the adult population in the Sothern Africa region is

formally banked.

Mobile money offers the unbanked a fast and hassle free access to financial

services.

The proliferation of mobile financial services has been so rapid giving

governments little room to develop formal regulatory frameworks.

Most countries in the region either do not have structured regulations for

mobile financial services or a flexible one exists.

There is a hybrid scenario regarding the regulation of mobile financial

services in the region between the ICT/Postal Regulator and the Financial

Services regulator; the former covering the platform or channel of

conveyance and the later content.

The role of mobile financial services as a catalyst for postal financial

inclusion is not clearly defined or regulated.

Regulation imbues important tenets of financial inclusion such as

affordability, accessibility (infrastructure), quality, and customer protection.

The increasing interest by mobile financial services operators to extend the

service across borders of the SADC region thus attracting greater attention

regarding Anti-Money Laundering (AML), Combating the Financing of

Terrorism (CFT) and customer security protection among other issues.

The market and technological convergence requiring re-consideration by

policy makers and regulators of policies or regulations affecting spectrum

deployment, competition, broadband, privacy and data protection,

taxation, numbering, tariff and licensing;

Further mobile financial services regulation is required in SADC regarding

the following:

i) Specific regulation on agent banking – specifying the role of non-

bank agents and non-bank issuers of mobile money.

ii) Specific requirements are needed regarding AML/CFT for agents.

iii) Protection of mobile money.

iv) Consumer protection ( understanding, data privacy and security)

v) Establishment of legal authority to regulate and supervise mobile

banking services.

Development of partnerships between the postal and mobile operators as

well as the Central banks to grow the mobile financial services through the

cash merchant business model.

In collaboration with mobile network operators, to provide consumer

awareness and education on mobile money services to grow the business

through quality of service and experience in service provision.

CRASA and SADC Member States to consider supporting the ITU Study on

the development of mobile money standards;

SADC, CRASA, SADC Banking Association, Non-Banking Financial Regulatory

Institutions, Southern Africa Postal Operators’ Association (SAPOA) and

Southern African Telecommunications Association (SATA) to look into

development of a SADC Inclusive Governance Framework for the provision

of mobile financial services.

Collaboration between Central Banks, Non-Banking Regulators, Postal

Operators and Communications Regulators to facilitate successful mobile

money postal financial inclusion;

Use of post offices to set up and co-sharing of ICT infrastructures, such as,

mobile towers to enhance mobile money deployment.

Consideration to extend the definition of Universal Postal Services to

include all aspects of financial inclusion;

Development of a SADC Model Policy, Laws and Regulations on Postal

Financial Inclusion.

To develop a clear postal regulatory framework aimed at improving

Corporate Governance and fostering reform of the sector in the region and

allowing Postal Operators to diversify into new areas of activity.

To improve the inter-operability of postal networks and systems at national

and regional levels.

To support the development and implementation of regional initiatives

aimed at offering seamless financial services within the postal service

taking into consideration security and customer protection parameters.

To urge Member States, within their budgetary resource allocation and

other constraints, to improve and provide physical infrastructural

development within the postal sector including electrification and Internet

connectivity to all Post Offices in the region.

To promote the harmonization of postal policies and legislation in order to

strengthen the capacity of Regulators.