+ 3. Assess your country’s political and socioeconomic context
The political and socioeconomic context can impact the DFS market and financial inclusion rates of a given country or region. It can also influence the pace and likelihood of policy change. Key questions and factors to consider are given below.
Note: The questions in the following sections are available in a downloadable Word template in English and French.
What are some of the political or economic events over the next 6-12 months that may impact your policymaking or regulatory process?
Examples can include upcoming political events such as elections or a public demand for a shift in national priorities that may lead the government to prioritize or deprioritize financial inclusion. A pandemic such as Covid-19 or a consequent recession may also be mentioned here. Following are some potential sources for relevant information on political, social, and economic issues:
While conducting this political and socioeconomic analysis, you may want to conduct a preliminary assessment of who are the actors with the most interest in developing DFS and with the most influence to do so whilst always keeping in mind contextual elements such as political elections, social crises, etc. This preliminary assessment should result in four categories of actors:
High interest, high influence – The most important actors for the purposes of advancing specific policies on DFS
Low interest, high influence – Actors who may be misinformed or who may oppose the relevant DFS policies
High interest, low influence – Actors who may be important to involve at later stages in the policy making process
Low interest, low influence – Actors that can be deprioritized
Here are some questions that may be asked to identify powerful stakeholders who may support or oppose the development of DFS in your country. If you do not have this information already, please consult a public affairs expert (questions drawn from the Annex of USAID’s Applied PEA Field Guide):
Who are the main actors of concern, and what motivates them? What is their relationship? What actions do they take regarding the issue? What interest(s) do they have? Who benefits from reform or lack of reform, and how?
Which socio-political features affect the issue and how – e.g., loyalties, clientelist networks, ethnic or sectarian cohorts, party affiliations, regional identities, gender ties?
Who benefits from rents or diversions of resources, how and why?
Who and which interests oppose change(s), and why? How empowered are they, and how do they wield their influence?
Are there domestic stakeholders wanting change? Why? Are they organized, empowered and influential enough to drive reforms? Why/why not?
Are there citizen groups (CBOs, NGOs, religious or traditional organizations, et al) that are organized and empowered, and able/willing to demand and/or make change around this issue?
Does the national political settlement (between the elite and government); the nature of political contestation; and/or the distribution of political power affect the problem? How/why?
Are your country’s international relations empowering a socio-economic group at the national level (e.g., influential diaspora in need of improved remittances systems or government’s relationships with a foreign telco group)?
List relevant statistics such as population, economic growth, poverty levels, rate of financial inclusion, level of human development, etc.
Additional relevant statistics depend on the context of your country. Is there an additional national objective that your country would like to achieve that may impact DFS or may be impacted by growth in DFS? You may add that statistic below to assist with your analysis.
- Number of displaced persons (internally and externally) (UNHCR)
- Rate of Financial Inclusion (Findex)
- Level of Human Development (HDI)
What relevant cultural and social norms or prevalent perceptions directly impact poverty reduction efforts, markets, financial inclusion, and growth in DFS?
Social or cultural norms are unwritten laws that may impact national objectives such as poverty alleviation, economic growth, or financial inclusion. These may vary from country to country. For example, in patriarchal societies women are less likely to have identification documents, which are often required to benefit from poverty reduction efforts and open bank accounts or mobile wallets. Prevalent perceptions such as mistrust in government institutions or financial institutions may also undermine poverty reduction or financial inclusion efforts.
