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Financial Regulation Compliance in Timor-Leste: Central Bank Celebrates Successes in Financial Inclusion Report

The Banco Central de Timor-Leste (BCTL), the central bank of Timor-Leste, has released its latest financial inclusion report, showcasing significant progress in increasing access to financial services. The report highlights a 200% increase in access points, greater uptake of financial services, and a complete set of quality indicators.

Key Findings

  • Bank account ownership among Timorese adults increased by four percent to 61 percent by the end of 2020.
  • Women accounted for 65 percent of total account holders.
  • There was an increase in non-regulated financial services, electronic wallets, and deposit-taking institutions.

Modernizing the National Payment System

BCTL Governor Abraão de Vasconcelos emphasized the importance of modernizing the national payment system, which has connected financial institutions and e-wallet services to the interoperable national switch. This development allows customers to transact digitally between service providers and facilitates transfers between bank accounts and e-wallet accounts.

Commitment to Inclusive Finance

The report highlights BCTL’s commitment to championing inclusive finance in Timor-Leste through innovative approaches, including:

  • Increasing access points
  • Modernizing payment systems
  • Enhancing financial services usage
  • Intensifying financial literacy programs

International Recognition and Support

The Association of Financial Institutions (AFI) Executive Director Dr. Alfred Hannig welcomed the report as an “essential read,” praising BCTL’s efforts to advance financial inclusion in Timor-Leste.

  • The country’s approach to women’s financial inclusion has been particularly striking, with a positive gender gap of eight percent.
  • Hannig encouraged BCTL to leverage AFI’s services, including working groups, regional initiatives, capacity building, and peer learning exchanges, to advance its financial inclusion goals.

Membership and Initiatives

BCTL has been an active member of the Association of Financial Institutions since 2010 and has completed nine of its 12 Maya Declaration targets. The central bank is part of the Pacific Islands Regional Initiative, which focuses on innovations such as regional regulatory sandboxes, de-risking, and inclusive green finance.

National Strategy for Financial Inclusion

The launch of the financial inclusion report comes as BCTL continues to implement its national strategy for financial inclusion (NFIS), a six-year initiative that runs until 2022. The central bank has also supported the development of finance for small and medium enterprises, leading to the implementation of a credit guarantee scheme.

Conclusion

The report highlights BCTL’s commitment to promoting financial inclusion in Timor-Leste and its efforts to increase access to financial services through innovative approaches.