This 
paper examines the effect of the COVID-19 pandemic on financial services by focusing specifically on financial inclusion in Rwanda, Sierra Leone and Zambia. The study explores changes in the “face-to-face (F2F) delivery of financial services” to groups traditionally underserved by the financial system, including “women, youths, small and medium enterprises, smallholder farmers and rural households.” The authors collected data via online surveys, webinars and interviews with representatives of consumer associations, financial services providers (FSPs) and supervisory authorities.
As expected, FSPs in the three countries experienced significant reductions in the F2F delivery of financial services upon the onset of the pandemic. The survey showed an increase from 17 percent to 36 percent in the use of mobile banking in Rwanda. While Zambia also experienced a significant increase in mobile and internet banking, its strategy also included expanding the use of agents. Sierra Leone experienced less significant upticks in alternative forms of banking, maintaining reliance on F2F services, possibly due to the comparatively light impact of COVID-19 on the country. In addition, survey respondents describe FSPs in Sierra Leone as risk-averse, possibly leading to less willingness to make quick operational changes. While the pandemic generally accelerated the shift away from F2F services, this change was already in progress, with governments having instituted policies to encourage digital delivery of financial services before COVID-19 emerged.
The authors found that despite the move to mobile and internet banking, there was no significant increase in financial inclusion among the groups studied due to several barriers: (1) limited access to technology; (2) low levels of digital literacy; and (3) concerns about data privacy when using digital services.
To increase financial stability and inclusion, the authors suggest financial supervisors: 1) work with stakeholders to increase citizens’ digital and financial literacy, so they are more able to use digital services; (2) increase communication regarding best practices for minimizing the risks of operating digitally, such as money laundering; and (3) enhance data extraction and analysis to monitor the shift of FSPs and their clients to digital channels.
This is a summary of a paper published by Toronto Centre, November 2021, 82 pages, available at https://res.torontocentre.org/guidedocs/Resilient%20and%20Inclusive%20Financial%20Services%20Delivery%20During%20COVID-19.pdf
By Bradley Shulman, Research Associate
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https://www.torontocentre.org
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