The Economic Programme Oversight Committee (EPOC) has expressed support for the International Monetary Fund’s (IMF) benchmarks related to the Jamaican Government’s National Financial Inclusion Strategy (NFIS).
Speaking at the Manchester Chamber of Commerce on October 5, EPOC Co-chair Keith Duncan outlined the key pillars of the NFIS. The Strategy is intended to create the conditions through which Jamaicans not currently participating in the formal banking system are able to gain financial security, thus boosting the country’s economic growth.
The key benchmarks of the strategy, Mr Duncan noted, are Financial Access and Usage (for example, increasing the number of Jamaicans with a bank deposit account to 95 percent); Financial Resilience (with 40 percent of Jamaicans saving at regulated financial institutions); Financing for Growth (increasing the value of loans to the MSME and agriculture sectors); and Responsible Financing (higher levels of confidence in the financial system among adults). All these are targeted for the year 2020.
Mr Duncan noted that the IMF benchmarks seek to address several major challenges. These include a reliance on cash (65 percent of workers receive their wages in cash); and financial vulnerability (only 30 percent of Jamaicans save money through a regulated financial institution). Only a small percentage (11 percent) of Jamaicans and 27 percent of small and medium enterprises (SMEs) have access to credit from these institutions. Moreover, distrust of financial institutions (around half of the population) and illiteracy are obstacles to bringing underserved Jamaicans into the formal economy.
In endorsing the Financial Inclusion Strategy, Dr Lonkeng Ngounga, IMF Resident Representative to Jamaica, noted: “Growth cannot be sustained if persons are not included.” Dr Nguounga added: “If the IMF programme is sustained, Jamaica is on track in improving the lives of its people.”
At its launch in March, Finance Minister Audley Shaw described the NFIS as “the Government’s commitment to create the enabling environment that makes it easier for Jamaicans to save, invest, to do business and obtain relevant financial products and information to empower themselves.”