"Global experience has shown that deepening and diversifying the financial system contributes to creating more jobs and reducing poverty," said World Bank Country Director for
The loan supports the government's efforts to maintain stability of the financial system by improving crisis prevention, management and resolution, including the work of the
The micro-insurance sector - very underdeveloped in
The DPL also addresses a very important goal for
"The cost of financial exclusion is income inequality," said Country Director Chaves. "The 'unbanked' pay higher costs for financial services and they are not able to make optimal investment and consumption decisions or protect themselves against unexpected events."
The DPL also supports the Government's reforms to improve consumer protection by establishing uniform obligations and enforceable regulations for financial service providers, through provision of clear and accurate information disclosure. Setting up dispute resolution mechanisms to handle consumer complaints is also key.
Other financial reforms on the agenda include: developing and implementing nationwide financial education programs; socializing a 'savings' culture, by expanding basic savings accounts with no fees and low minimum balance requirements; and promoting branchless banking.
This DPL builds on the 2012 Financial Sector and Investment Climate Reform and Modernization Development Policy Loan ('FIRM DPL'), which also focused on business environment reforms.
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