And how they are prioritising consumer financial protection in the year ahead.

A strong foundation

The Bank of Sierra Leone (BSL) – the country’s central bank – is prioritising financial consumer protection. The BSL regulates and supervises all financial institutions (except insurance providers) and has already included consumer protection elements in several guidelines including those related to mobile money and agents. It is therefore ideally placed to take institutional responsibility for financial consumer protection and started this journey on a strong foundation.  

After visiting the Central Bank of Nigeria’s Consumer Protection Department, Philip Bangura was inspired to write a first draft of the brand-new consumer protection guidelines for Sierra Leone. The need was particularly pressing as customers had started to contact the BSL’s Banking Supervision Department directly in instances where commercial banks do not resolve their complaints.  

UNCDF is a long-standing partner to the BSL thanks to our Digital Financial Services Expert based in Freetown, Wycliffe Ngwabe, and our collaboration on consumer protection started in August 2019. 

Keeping a pulse on consumer protection issues  

First, we conducted a diagnostic study in November 2019 by interviewing a variety of stakeholders (including banks, rural finance institutions and their customers, mobile money service providers, other government authorities, and development partners) in Freetown and Tombo. We found that all types of financial institutions share a customer service focus, but differ widely in terms of scale and the use of technology. In addition, the BSL usually sets different rules for these financial institutions. For example, while mobile money services providers are subject to certain disclosure and transparency requirements, this is not as clear for commercial banks and their retail customers. 

In February 2020, the BSL decided to move forward with a centralised approach – standalone guidelines for financial consumer protection to apply to all regulated financial institutions –  with the aim to hold all institutions to a common standard on ‘universal’ issues such as complaints handling, reduce regulatory arbitrage, and improve the quality of service across the industry as a whole. In March 2020, three BSL staff members completed the Digital Frontier Institute’s online course called Consumer Protection: As a Business Strategy. 

Over a series of teleconference calls from April to June 2020, the BSL and UNCDF worked together to review the draft guidelines against similar approaches in countries such as Nigeria, Kenya, Liberia and Tanzania. We added definitions, addressed gaps in sections such as data protection and privacy (in line with the World Bank’s 2017 Good Practices for Financial Consumer Protection), and checked the proportionality and appropriateness of requirements for the Sierra Leonean context.

Next steps

Looking forward, the BSL will seek feedback on the new guidelines through public consultation. We also plan to support the BSL to raise awareness on consumer protection issues across the country as part of their financial literacy work. Ideas include focus groups with leaders in rural communities and radio jingles on consumer rights and responsibilities. 

What we’re reading

• Bank of Sierra Leone – National Strategy for Financial Inclusion 2017-2020 

• CGAP Technical Guide – Implementing Consumer Protection (FR)

Last updated March 2021.

Authors

Naomi Bourne

Alexis Ditkowsky