Establish and Operationalize a National Monitoring Body for the Quality of Financial Services (CI0015)

Current Situation or problem/question to be addressed/having to be resolved: -Insufficient protection of consumers of financial services -Poor transparency in financial services delivered to consumers -inefficiency of structures in charge of arbitration of clients’ complaints towards banks and DFS; Main purpose: Ensure the protection of consumers of financial services; Brief description of Commitment: The purpose of the Monitoring body of the Quality of Financial Services is to: -Inform the public on financial services and their costs; -Ensure mediation between financial institutions and their clients in case of dispute; and -Promote financial education. OGP challenges addressed by the commitment: - The monitoring body addresses the following challenges: -Public service enhancement -Increase corporate accountability; -Creation of more secured communities; Relevance: -Protection of clients of Banks, financial institutions, insurance companies and Decentralized Financial Services; -Promotion of international transparency practices; -Promotion of banking; -Availability of information on financial services; Ambition: -Compliance with rules governing banks, financial institutions insurance companies and Decentralized Financial Services; -Compliance with international standards in the matter of consumers' protection; -Improve populations’ perception and trust in the financial system. -Improve banking rate

15. National monitoring body for the quality of financial services

Commitment Text:

Brief description of the commitment

The purpose of the Monitoring body of the Quality of Financial Services is to:

- Inform the public on financial services and their costs;

- Ensure mediation between financial institutions and their clients in case of dispute; and

- Promote financial education.

Verifiable and quantifiable stage for the implementation of this commitment: Preparation of the institutional legal framework of the monitoring body.

15.1. Adoption of the decree establishing the monitoring body

15.2. Implementation of the monitoring body

15.3. Operationalization of the monitoring body

Editorial Note: Milestone 15.1 was implemented before the implementation period. This report focuses on those milestones that were implemented during the period under consideration.

Responsible institution: Ministry Responsible for the Economy and Finances. Supporting institution: Program for the Development of the Financial Sector Start date: May 2016

End date: Continuing

Context and Objectives

This commitment seeks to encourage consumer protection in financial services and to better acknowledge and more conscientiously process customer complaints. The image of financial services and their customer relations needs to be improved. Ivorians do not have confidence in banking services, as in the past, several banks have been shut down, reorganized, or privatized.1 This commitment also aims to improve confidence in the financial system.

In addition, this commitment aims to make information available about financial services. According to the representative from the Ministry of Economy and Finance, the financial institutions in Côte d’Ivoire

function normally, the number of agencies in areas of important economic activity has increased, and the mechanisms for managing customer relations have been modernized. These advances show that the financial sector is in a good state of health.2 However, the representative also pointed out that some of these services did not live up to the expectations of their customers.3 There exist many financial services sector failings in customer protection, such as ignorance of alternative means for settling any conflicts, (arbitration, legal mediation transactions, conciliation, etc.). Other shortcomings include the inherent difficulties concerning regulated inflation in the economic and financial environment and the absence of a method for consumers to compare services between different suppliers of financial services. Consequently, there is mistrust of financial services, which leads people not to put their savings in banks, for example.4 Only one person in eight puts their savings in a bank, which is less than half the average for the African continent.5 This low participation is connected to a loss of earnings.6 Regarding transparency in the financial services, the failings highlighted by the government are associated with the disparity in information and the complex tariffs of products and services.7

It is important therefore for the government to create and render operational a National Monitoring Body for the Quality of Financial Services. This monitoring body will encourage improved quality of financial products and services through action promoting the development of financial leasing. It will also reinforce relations between financial service operators and their clients with the establishment of an office for credit information.8 The monitoring body will also have a mechanism for mediation, to encourage the amicable resolution of disputes between financial organizations and their clients. This will generate greater confidence in the sector,9 which would aid its development.

This commitment has a moderate potential impact. The creation of a monitoring body should help restore faith in the banking system, which should encourage its use. However, the commitment does not contain measures to inform the public of the body’s existence, which would ensure the body is used. There is a similar monitoring body in Senegal, but it is not well known by the public and consequently not well used.10

This commitment does not have a direct link with the measures assessed by OGP. It concerns financial services and banks, not information relating to the government itself. Nevertheless, the commitment as it is drafted in the action plan is clear and contains implementation milestones that are verifiable and quantifiable.

Completion

15.1. Establishment of the institutional and legal framework for the monitoring body: This milestone has been completed. The legal framework for the monitoring body has been available since December 2016, according to the representative from the Ministry of Economy and Finance. The representative noted that civil society had been involved.11 The Federal Union of Consumers and the National Federation of Côte d’Ivoire Consumers Associations had been involved and are members of the steering committee of the monitoring body. On 21 December 2016,12 the Inter- ministerial Council announced the adoption of a decree bearing the mention of the creation, organization, and operation of the National Monitoring Body for the Quality of Financial Services in Côte d’Ivoire, or the OQSF-CI.

15.2. Adoption of the decree on the creation of the monitoring body: This milestone is largely completed. Decree No. 2016-1136 for the creation, organization, and operation of the National Monitoring Body for the Quality of Financial Services in Côte d’Ivoire was adopted on 21 December 2016.13

15.3 and 15.4. Establishment and operation of the monitoring body: This milestone has not been completed. According to a representative from the Ministry of Economy and Finance, the minister of economy and finance adopted a decree showing the nomination of the members of the body’s steering committee. The director general of treasury and public accounting presides over this committee.14 The executive secretary of the National Monitoring Body for the Quality of Financial

Services (OQSF-CI), according to this representative, was also nominated by the Ministry of Economy and Finances decree. The representative confirmed that OQSF-CI is not fully operational. The government submitted no evidence to the IRM researcher, who also found no evidence following their investigations.

Early Results (if any)

As the monitoring body is not operational, it is too soon to judge its effectiveness. Civil society, represented by consumers associations and professionals, reacted positively to the creation of the body, according to the government representative.15

The representative added that the financial mediation mechanism is being created. This mechanism will be responsible for settling legal disputes between financial organizations and their clients concerning financial products. When asked whether he thought that the public’s opinions of and confidence in the financial system had improved, he replied that he did not have enough factual information to reply to the question. The representative responded similarly to a question about the improvement of bank rates.

Next Steps

The civil society report suggests specifying the different milestones and the period needed to implement them. Doing so would provide a better vision for the final completion of this commitment.

According to the IRM researcher, this commitment should not be renewed in the next action plan, despite the fact that its impact will be positive if fully implemented. This commitment will protect citizens. However, it does not stem from information diffused by the government, but by banks.

1 'Services Financiers en Côte d’Ivoire: Les Banques Delaisses au Profit du Mobile Money,' La Banque Mondiale, July 2016, http://www.banquemondiale.org/fr/country/cotedivoire/publication/financial-services-in-cote-divoire-banks-set-aside-in-favor-of- mobile-money.

2 Samuel Atchelo Kouadio, Head of Justice Department, Program for the Development of the Financial Sector, Ministry of Economy and Finance, email exchange with IRM researcher, 20 February 2018.

3 Ibid.

4 'Services Financiers en Côte d’Ivoire: Les Banques Delaisses au Profit du Mobile Money,' La Banque Mondiale, Juillet 2016, http://www.banquemondiale.org/fr/country/cotedivoire/publication/financial-services-in-cote-divoire-banks-set-aside-in-favor-of- mobile-money.

5 Ibid.

6 Ibid.

7 Samuel Atchelo Kouadio, Head of Justice Department, Program for the Development of the Financial Sector, Ministry of Economy and Finance, email exchange with IRM researcher, 20 February 2018.

8 'Qualité des Services Financiers de Côte d’Ivoire: Le Ministre Adama KONE a Procédé au Lancement des Travaux de l’Observatoire,' Abidjan.net, 26 May 2017, http://news.abidjan.net/h/615758.html.

9 Fulbert Yao, 'Côte d’Ivoire: Création d’un Observatoire de la Qualité des Services Financiers,' La Synthese, 21 December 2016, http://lasynthese.net/wordpress/2016/12/21/cote-divoire-creation-dun-observatoire-de-la-qualite-des-services-financiers/. 10 O. Fedior, 'Observatoire de la Qualite dans les Banques: Les Clients en Sont-ils Conscients?' Reussir Business, 23 August 2014.

11 Samuel Atchelo Kouadio, Head of Justice Department, Program for the Development of the Financial Sector, Ministry of Economy and Finance, email to the IRM researcher, 20 February 2018.

12 'Conseil des Ministres du 21-12-2016,' Portail Officiel du Gouvernement de Côte d’Ivoire, http://www.gouv.ci/_conseil- ministre-details.php?recordID=287.

13 'Journal Officiel de la République de Côte d’Ivoire,' Abidjan.net, 13 April 2017, http://abidjan.net/JO/JO/29342017.asp. 14 Samuel Atchelo Kouadio, Head of Justice Department, Program for the Development of the Financial Sector, Ministry of Economy and Finance, email to the IRM researcher, 20 February 2018.

15 Ibid.

Commitment 15: Establish and operationalize a national monitoring body for the quality of financial services

Brief Description of the commitment:

- The purpose of the Monitoring body of the Quality of Financial Services is to:

- Inform the public on financial services and their costs;

- Ensure mediation between financial institutions and their clients in case of dispute; and

- Promote financial education.

Measurable and verifiable steps to achieve the commitment

15.1. Preparation of technical notes and implementation of studies

15.2. Preparation of the institutional legal framework of the monitoring body

15.3. Adoption of the decree establishing the monitoring body

15.4. Implementation of the monitoring body

15.5. Operationalization of the monitoring body

Editorial Note: In the National Action Plan, the government completed Milestone 15.1 prior to the commitment implementation period. This evaluation will therefore focus on the three remaining milestones that took place during the concerned implementation period.

Responsible Institution(s): Ministry in charge of Economy and Finance, under the authority of the Prime Minister.

Supporting Institution(s): Financial Sector Development Programme

Start Date: May 2016 End Date: Continuous

Action Plan is available here:

Commitment Aim:

This commitment aims to protect financial services consumers through improved consideration and diligent response to their complaints. Specifically, the objective is to improve financial service providers’ image concerning customer relations. In addition to protecting consumers, this commitment also aims to make financial services information available to them.

Status

Midterm: Substantial

The government created the institutional and legal framework for the monitoring through (“the observatory”). It adopted the Decree No. 2016-1136 for the creation, organization, and operation of the National Monitoring Body for the Quality of Financial Services in Côte d’Ivoire (OQSF-CI) on 21 December 2016 although the IRM researcher was unable to obtain evidence of its existence. The government did not establish and operationalize the observatory. For more information, please see the 2016-2018 IRM midterm report. ^[91]

End of term: Substantial

The government provided the IRM researcher with the Decree for the creation, organization, and operation of the OQSF-CI (Milestone 15.2) ^[92]. According to a report ^[93] provided by the government on this commitment, a ministerial decree appointed the members of the Orientation Council (Milestone 15.3). The government did not provide the said decree to the IRM researcher and it was not found online.

Based on the report received, the Council adopted the key texts (rules of procedure, management of the service comparison tool, management of financial mediation, etc.) (Milestone 15.1). According to the same report, the government recruited the executive secretary of the observatory through a public procurement notice, and a ministerial decree appointed him afterward. The government did not provide the decree to the IRM researcher. ^[94] Based on the report received, the operation of the observatory (acquisition and equipping of offices, staff recruitment, etc.) is in progress (Milestone 15.4). In an article dated May 2018, ^[95] the Minister of Economy and Finance launched the activities of the OQSF. The government is also working on a website for the observatory. ^[96]

The observatory is effective and this commitment is still under way in accordance with the action plan. However, because the provided report is neither official nor public, the commitment is only substantially complete.

Did It Open Government?

Access to information: Did not change

Civic participation: Did not change

Public accountability: Did not change

There are several problems relating to the protection of financial service consumers and this commitment aims to tackle them. However, in addition to the unclear relevance of this commitment to the OGP core values, there is no positive change in opening government as a result of this commitment. The IRM researcher was unable to interview a member of civil society who is an expert regarding this commitment, despite several unanswered requests. ^[97]

Carried Forward?

The commitment was not carried into the new national action plan for 2018−2020.