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Financial Inclusion and Crime Prevention in Senegal: A Path Forward Amidst COVID-19 Pandemic

Dakar, Senegal - As the world grapples with the COVID-19 pandemic, financial inclusion has become a vital tool for vulnerable communities to manage shocks, secure adequate nutrition, and help small businesses stay afloat. Senegal, with its strategic geographic position in West Africa, is poised to lead by example in promoting digital financial inclusion.

Progress in Financial Inclusion

Senegal has made significant progress in increasing access to formal financial services among adults, from 15% in 2014 to 42% in 2017, according to the World Bank Group Global Findex. This achievement serves as a beacon for other countries.

Leveraging Digital Financial Inclusion

In recent years, Senegal has successfully leveraged digital financial inclusion to promote social distancing and public health during the pandemic. Authorities have incentivized the use of electronic transactions, allowing for more efficient mobile money account openings through remote identification and client verification protocols.

International Cooperation

The Central Bank of West African States (Banque Centrale des Etats de l’Afrique de l’Ouest, BCEAO), headquartered in Dakar, is taking note of Senegal’s progress. The BCEAO member states include Benin, Burkina Faso, Côte d’Ivoire, Guinea-Bissau, Mali, Niger, and Togo.

UN Secretary-General’s Special Advocate for Inclusive Finance

In January 2021, UN Secretary-General’s Special Advocate for Inclusive Finance for Development (UNSGSA) Queen Máxima of the Netherlands conducted a virtual country visit to Senegal. The visit aimed to support the country’s efforts in:

  • Finalizing its National Financial Inclusion Strategy (NFIS)
  • Promoting payments digitization
  • Supporting responsible oversight and development of fintech
  • Modernizing legal and regulatory frameworks for the financial sector

Recommendations from Queen Máxima

During her meetings with President Sall and Minister of Finance Diallo, Queen Máxima commended Senegal’s progress on drafting its NFIS and suggested elevating its importance in the policy agenda to support broader economic and social inclusion objectives. She also emphasized the need for setting up working groups on:

  • Gender
  • Financial technology
  • Digital payments
  • Financial education/financial consumer protection

Fintech Development

Queen Máxima stressed the need for investment in foundational infrastructure, including key digital public goods such as connectivity and digital ID. She also advocated for setting up a fintech innovation office to support responsible development and oversight objectives.

The UNSGSA emphasized the importance of modernizing legal and regulatory frameworks for the financial sector in Senegal and throughout the BCEAO. She suggested projects aimed at updating legal and regulatory texts related to banking and microfinance sectors, ensuring they are in line with international consensus guidelines and well positioned to support effective supervision and market development.

International Cooperation

The Better than Cash Alliance, United Nations Capital Development Fund (UNCDF), and the World Bank joined Queen Máxima’s country visit, underscoring the importance of international cooperation in promoting financial inclusion and crime prevention in Senegal. As the country continues to navigate the challenges posed by COVID-19, its commitment to digital financial inclusion will be crucial in driving economic growth and social development.