Regional : Strengthening Financial Sector Operations in Asia and the Pacific

Finance / Finance sector development - Inclusive finance

Enabling environment to increase investment opportunities in domestic financial markets of DMCs improved through enhanced quality of operational support

Capacity of DMCs to promote finance sector development enhanced at the national level

Conducted the Second Asia Finance Forum on 8-10 November 2017 at ADB Headquarters._Conducted the Third Global Infrastructure Forum on 13 October 2018 at Bali, Indonesia.

Pilot projects for MON and GEO_have identified service provider and are finalizing service agreement. Identification of development milestone are ongoing.

Pilot projects for investment opportunities in emerging finance sector areas identified

Cross-sector knowledge on financial solutions delivered

Output 1: Following the development of a roadmap on digital financial services under TA/9017: Unlocking Innovation for Development,3 the TA has identified the following pilot projects to be conducted: (i) a digital shared platform will be implemented in Mongolia to facilitate the digitization of customer onboarding and loan processing, enabling nonbank financial institutions (NBFIs) to automate and standardize their work flow. The front end will include a digital field application (DFA) on a tablet. It will be used by loan officers or NBFI agents to onboard and process loan applications; (ii) a tablet-based DFA will be implemented for agents, such as agro-product stores, to offer credit to farmers in Georgia. Using DFA, agro-dealers or the bank's desk officers can facilitate loan processing. Customer data will be gathered digitally and fed into a credit-decision tool to approve/reject a loan within 15 minutes of request. Due diligence for participating institutions has been conducted and solutions providers identified. The implementation agreements are being finalized in consultation with CTL, OAI, OGC, PPFD, and relevant operations departments. The Papua New Guinea pilot project is at design stage. The pilot projects in Georgia and Mongolia are expected to commence within the second quarter 2019 and the Papua New Guinea project in the fourth quarter of 2019.

Output 2: The TA supported the conduct of the Second Asia Finance Forum: Fintech and Sustainable Development on 810 November 2017 at ADB Headquarters. The event provided valuable insights into themes running from information and communications infrastructure to payment systems and new financial technologies associated with blockchain technology.4 Following that, the Third Global Infrastructure Forum was held on 13 October 2018 in Bali, Indonesia wherein top officials from multilateral development banks and the private sector explored ways to unlock inclusive, resilient, and sustainable technology-driven infrastructure. President Nakao, in a panel discussion with other MDB leaders, expressed optimism about the ability of Asia and Pacific economies to adopt and integrate technology and innovation into the planning, implementation, and management of critical infrastructure. The event has strengthened ADB's reputation in the area of infrastructure finance and provided a solid foundation to continue driving the infrastructure agenda.

Mission fielded to SRI on 15 -23 March for consultation to explore the feasibility of conducting a pilot project supporting a non-cash payment facility and e-billing system for water supply services in local governments. This will include exploring options for a digital approach of payment through mobile devices or prepaid cards enabling secure, convenient and affordable payment channels that will lower the cost of transactions.

Mission fielded to PNG on 19-22 June 2018 to explore the expansion of a pilot project carried out in 2017 in collaboration with the Bank of Papua New Guinea that integrates biometric authentication and blockchain technology with the objective to expand access to finance and to promote financial and social inclusion, especially to populations in areas with limited access to electricity and Internet.

Follow up mission fielded to PNG on 14-18 January 2019_to discuss possibilities, way forward and issues associated with development of: (i) digital ID regulatory enablement framework; (ii)enabling KYC/e-KYC framework; (iii)alternative solutions to address connectivity gaps to enable access to financial services in remote rural areas; and (iv) regulatory sandbox framework._Cybersecurity considerations, requirements and capacity was also reviewed and discussed.

Mission fielded to MON on 22-26 October 2018 to meet Non-Banking Financial Institutions and the selected service provider to identify pilot project preparation and conduct initial interviews with management and key staffs. NBFIs and regulatory authority were also met to seek an understanding of capacity building needs on cloud technology, cyber security and other relevant areas.

Mission fielded to GEO on 25 February-1 March 2019 to_finalize pilot project preparation and conduct initial interviews with management and key staffs. Capacity building workshops on cyber security, digital financial solutions, and regulatory sandbox were conducted for beneficiaries to learn comprehensive security policies and procedures and best practices.

Both individual and firm consultants will be engaged under this TA.

With the minor change in implementation arrangement an additional national consultant will be recruited to support pilot projects in Mongolia.