Resolution No. JPRF-P-2023-080: Issuance of the National Financial Inclusion Policy and its Management Instrument, the National Financial Inclusion Strategy 2023-2027

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RESOLUTION No. JPRF-P-2023-080

THE FINANCIAL POLICY AND REGULATION BOARD

CONSIDERING:

That, Article 1 of the Constitution of the Republic of Ecuador provides that Ecuador is a constitutional state of rights and justice, social, democratic, sovereign, independent, unitary, intercultural, plurinational, and secular;

That, Article 3 of the Magna Carta determines the primary duties of the Ecuadorian State, among which are: “1. Guarantee without any discrimination the effective enjoyment of the rights established in the Constitution and in international instruments (...); 5. Plan national development, eradicate poverty, promote sustainable development and the equitable redistribution of resources and wealth, to access good living. (...)”;

That, Article 11, numbers 2 and 9 ibidem, in order, provides that the exercise of rights shall be governed, among other principles, by the following: all persons are equal and will enjoy the same rights, duties, and opportunities; and, the highest duty of the State consists of respecting and ensuring respect for the rights guaranteed in the Supreme Norm;

That, Article 14 of the Fundamental Law recognizes the right of the population to live in a healthy and ecologically balanced environment, which guarantees sustainability and good living, sumak kawsay;

That, Article 35 of the Supreme Norm provides that older adults, children, adolescents, pregnant women, persons with disabilities, persons deprived of liberty, and those suffering from catastrophic or high-complexity diseases, will receive priority and specialized attention in the public and private sectors;

That, Article 66, number 25, of the Constitution provides that the State recognizes and guarantees to persons the right to access quality public and private goods and services, with efficiency, effectiveness, and good treatment, as well as to receive adequate and truthful information about their content and characteristics;

That, Article 84 of the Fundamental Charter provides that the National Assembly and any organ with normative power shall have the obligation to adapt, formally and materially, the laws and other legal norms to the rights provided therein and international treaties, and those that are necessary to guarantee the dignity of the human being or of communities, peoples, and nationalities. It also contemplates that legal norms nor acts of public power will attack the rights recognized by the Constitution;

That, Article 85 of the Fundamental Norm provides that the formulation, execution, evaluation, and control of public policies and services that guarantee the rights recognized by the Constitution, shall be regulated in accordance, among other provisions, with: “Public policies and the provision of public goods and services shall be oriented to make good living and all rights effective, and shall be formulated based on the principle of solidarity.”;

That, Article 141 of the Constitution establishes that the Executive Function is integrated by the Presidency and Vice Presidency of the Republic, the Ministries of State, and the other organisms and institutions necessary to fulfill, within the scope of their competence, the attributes of stewardship, planning, execution, and evaluation of national public policies and plans created to execute them;

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That, Article 226 of the Supreme Law prescribes that institutions of the State, their organisms, dependencies, public servants, and persons who act by virtue of a state power shall exercise only the competencies and faculties attributed to them in the Constitution and the law; having the duty to coordinate actions for the fulfillment of their ends and to make effective the enjoyment and exercise of the rights recognized in the Constitution;

That, Article 227 of the Magna Carta establishes that public administration constitutes a service to the community that is governed by the principles of effectiveness, efficiency, quality, hierarchy, deconcentration, decentralization, coordination, participation, planning, transparency, and evaluation;

That, Article 276 of the Fundamental Law provides that the development regime shall have, among other objectives, the following: Improve the quality and life expectancy, and increase the capabilities and potentialities of the population within the framework of the principles and rights established by the Constitution; and, Build an economic system, just, democratic, productive, solidary, and sustainable based on the equal distribution of the benefits of development, of the means of production, and in the generation of dignified and stable work;

That, Article 303 of the Constitution of the Republic provides that the formulation of monetary, credit, exchange, and financial policies is the exclusive faculty of the Executive Function and shall be implemented through the Central Bank;

That, Article 308 of the Supreme Law determines that the State will foster access to financial services and the democratization of credit;

That, Article 340 of the Fundamental Norm provides that the national system of inclusion and social equity is the articulated and coordinated set of systems, institutions, policies, norms, programs, and services that ensure the exercise, guarantee, and enforceability of the rights recognized in the Constitution and the fulfillment of the objectives of the development regime;

That, Article 2 of the Organic Monetary and Financial Code, Book I, provides that its scope is to establish the framework of policies, regulations, supervision, control, and accountability that governs the monetary and financial systems, as well as the regimes of securities and insurance, the exercise of their activities, and the relationship with their users;

That, Article 3, numbers 2, 6, 7, and 10 of the aforementioned Code, in order, determines the following objectives: ensure that the exercise of monetary, financial, securities, and insurance activities is consistent and integrated; protect the rights of users of financial, securities, and insurance services; and, promote access to credit for persons in human mobility, persons with disabilities, young people, single mothers, and other persons belonging to priority attention groups;

That, Article 4, numbers 1, 4, 5, and 6 ibidem, in order, consecrates the following guiding principles: the prevalence of the human being over capital; inclusion and equity; the strengthening of trust; and, the protection of citizen rights;

That, Article 5 of the aforementioned Organic Code, precepts that the formulation of policies and regulations in matters of monetary, credit, exchange, financial, as well as insurance and securities, is the privative faculty of the Executive Function and has as objectives those determined in articles 284 and 302 of the Constitution of the Republic and those established in the National Development Plan;

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That, Article 9 of the Code ut supra provides that the regulation and control organisms and the Deposit Insurance Corporation, Liquidity Fund, and Private Insurance Fund, shall have the duty to coordinate actions for the fulfillment of their ends and to make effective the enjoyment and exercise of the rights recognized in the Constitution, for which effect they will exchange data or reports related to the entities subject to their regulation and control;

That, Article 13 of the Organic Monetary and Financial Code, Book I, reformed through the Organic Reformatory Law to the Organic Monetary and Financial Code for the Defense of Dollarization, published in the Official Register No. 443 of May 3, 2021, created the Financial Policy and Regulation Board, part of the Executive Function, as a legal person of public law, with administrative, financial, and operational autonomy, responsible for the formulation of credit, financial, securities, insurance, and prepaid comprehensive health care services policy and regulation;

That, Article 14 of the Code ibidem, in its numbers 1 and 4, established that, within the scope of the Financial Policy and Regulation Board, it corresponds to formulate credit, financial policies, including insurance policy, prepaid comprehensive health care services, and securities; as well as, formulate policies and issue regulations that foster financial inclusion in the country, in coordination with entities of the public and private sectors related to its scope;

That, Article 14.1, numbers 10 and 15, letters c. and d. of the aforementioned Organic Code, in order, determines as functions of the Financial Policy and Regulation Board the following: “10. Promote financial inclusion processes and the full exercise of the rights of financial users; 15. Establish, within the framework of its competencies, any measure that contributes to: c. The creation of products oriented to promote and facilitate the financial inclusion of priority attention groups. d. Foster financial inclusion, promoting the participation of financial entities and of securities, insurance, and prepaid comprehensive health care services.”;

That, Article 9 of the Organic Administrative Code establishes the Principle of coordination, defining this as the obligation of public administrations to develop their competencies in a rational and orderly manner;

That, Article 26 of the Code ut supra provides the Principle of co-responsibility and complementarity, by which public administrations have shared responsibility and will manage in a complementary manner, within the framework of their own competencies, the actions necessary to make effective the enjoyment and exercise of rights of persons and the fulfillment of the objectives of good living;

That, Article 28 of the aforementioned Code contemplates the Principle of collaboration, by which administrations will work in a coordinated, complementary manner, and lending mutual aid; agreeing on coordination mechanisms for the management of their competencies and the efficient use of resources;

That, Articles 15 and 17 of the Organic Code of Public Planning and Finances prescribe that the definition of national public policy corresponds to the Executive Function, according to its scope of competencies; and orders the head entity of national planning, that is, the National Secretariat of Planning, to elaborate methodological instructives for the formulation, monitoring, and evaluation of national and sectoral public policies; which shall be complied with by the actors responsible for the formulation and implementation of the public policy;

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That, Article 4 of the Regulation of the Organic Code of Public Planning and Finances prescribes that the actors responsible for the formulation and implementation of public policy shall comply with the public policy cycle with regard to the formulation, coordination, implementation, monitoring, and evaluation of policies;

That, the Technical Secretariat of the Financial Policy and Regulation Board, through Memorandum No. JPRF-ST-2023-0075-M of September 15, 2023, and its extension with Memorandum No. JPRF-ST-2023-0077-M of September 25, 2023, submits to the President of the Board the following scope reports:

i) The Scope of Technical Report No. JPRF-CTIFSP-2023-0021 of September 15, 2023, concludes that financial inclusion promotes the reduction of exclusion and inequality gaps, achieves greater productivity, economic well-being, and consequently a decrease in poverty, so it is pertinent that the country have a National Financial Inclusion Policy, whose management instrument is the National Financial Inclusion Strategy (ENIF) 2023-2027 built in a participatory manner between public and private actors, with the purpose of articulating and coordinating actions for the fulfillment of the Policy's objectives.

ii) The Scope of Legal Report No. JPRF-CJF-2023-042 of September 15, 2023, concludes the following:

Article 141 of the Constitution of the Republic of Ecuador establishes that the Executive Function is integrated by the Presidency and Vice Presidency of the Republic, the Ministries of State, and the other organisms and institutions necessary to fulfill, within the scope of their competencies, the attributes of stewardship, planning, execution, and evaluation of national public policies and plans created to execute them.

The Organic Monetary and Financial Code, Book I, in its article 13, creates the Financial Policy and Regulation Board, as part of the Executive Function, responsible for the formulation of credit, financial, securities, insurance, and prepaid comprehensive health care services policy and regulation. Furthermore, article 14, number 4 determines that it has the faculty to formulate policies and regulations that foster financial inclusion in the country, in coordination with entities of the public and private sectors related to its scope.

For the performance of its functions, the Financial Policy and Regulation Board must comply with the following duties and exercise the following attributes provided in article 14.1, numbers 10 and 15 of the aforementioned Organic Code: promote financial inclusion processes and the full exercise of the rights of financial users; and, establish, within the framework of its competencies, any measure that contributes to the creation of products oriented to promote and facilitate the financial inclusion of priority attention groups and foster financial inclusion, promoting the participation of financial entities and of securities, insurance, and prepaid comprehensive health care services.

iii) Report No. JPRF-CTCJ-2023-012 of September 25, 2023 as an extension to Technical Report No. JPRF-CTIFSP-2023-0021 and Legal Report No. JPRF-CJF-2023-042 both of September 15, 2023, issued by the Technical Coordination of Financial Inclusion and Prepaid Health Policy and the Legal Coordination of Financial Policy and Norms, respectively; which collects the analysis of the comments made by the delegate of the Monetary Policy and Regulation Board to Annex “National Financial Inclusion Strategy (ENIF) 2023 - 2027”, which concludes that:

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Address: Av. Amazonas between Pereira and Unión Nacional de Periodistas Governmental Financial Management Platform. Yellow Block, 5th Floor | Postal Code: 170507 | Quito - Ecuador |

“The Proposal for the ‘National Financial Inclusion Strategy (ENIF) 2023 – 2027’, an integral part of the Proposal for the ‘National Financial Inclusion Policy’, complies with what is stated in articles 226 and 227 of the Constitution of the Republic of Ecuador and the legal provisions of the Organic Monetary and Financial Code, Book I, since it recognizes and respects the competencies and faculties attributed to the institutions and public organisms that make up the government system of said policy; as well as, the duty to coordinate actions for the fulfillment of their ends and to make effective the enjoyment and exercise of the rights recognized in the Magna Carta. Consequently, the document of the Proposal for the ‘National Financial Inclusion Strategy (ENIF) 2023 – 2027’ does not transgress any constitutional or legal norm, since it recognizes and respects the autonomy and competencies of each public institution and organism that is part of the National Council for Financial Inclusion Coordination (CONCIF).”;

That, the Financial Policy and Regulation Board, in an ordinary session held by technological means, convened on September 15, 2023, and carried out through video conference on September 21 and 25, 2023, learned of Memorandum No. JPRF-ST-2023-0073-M of September 15, 2023; and its extension with Memorandum No. JPRF-ST-2023-0077-M of September 25, 2023 issued by the Technical Secretariat of the Board; as well as the aforementioned reports from the Technical Coordination of Financial Inclusion and Health Policy and Regulation, and from the Legal Coordination of Financial Policy and Norms, in addition to the draft resolution and its Annex No. 1 corresponding;

That, the Financial Policy and Regulation Board, in an ordinary session held by technological means, convened on September 15, 2023, and carried out through video conference on September 21 and 25, 2023, learned of and approved the following Resolution and its Annex No. 1; and,

In exercise of its functions,

RESOLVES:

SINGLE ARTICLE.- The “National Financial Inclusion Policy” is approved and issued. For this effect, in the Codification of Monetary, Financial, Securities, and Insurance Resolutions, Book IV “POLICIES” is created, and Title I is incorporated as follows:

“TITLE I: NATIONAL FINANCIAL INCLUSION POLICY

Article 1.- National Financial Inclusion Policy.- The National Financial Inclusion Policy defines the general guidelines to foster inclusive financial systems directed at natural and legal persons, particularly those belonging to priority attention groups, based on the participation, agreements, and consensuses between public and private institutions, contributing to strengthening well-being, equality, and equity in Ecuador.

Article 2.- Objectives.- The objectives of this Policy are:

1. Promote accessibility to formal financial products and services for the citizenry;
2. Incentive the frequent, adequate, and safe use of formal financial products and services;
3. Foster access to and use of regulated financial products and services, considering user protection, financial education; and, the validity of a regulatory framework favorable to financial inclusion;
4. Drive the use of financial products and services through user protection in financial terms in terms of transparency, fair treatment, respect for data privacy, among others; and,

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Address: Av. Amazonas between Pereira and Unión Nacional de Periodistas Governmental Financial Management Platform. Yellow Block, 5th Floor | Postal Code: 170507 | Quito - Ecuador |

5. Generate actions to develop skills that allow the citizenry to understand, manage, and plan their personal and family finances, as well as to use formal financial products and services adequately and responsibly.

Article 3.- Purpose.- The purpose of this Policy is to promote financial inclusion in the country, aligned with the dimensions of access, use, and quality of formal financial products and services, as well as financial education; guaranteeing the protection of the rights of financial users.

Article 4.- Scope.- The scope of application of this Policy is national. It comprises public and private institutions and organisms that are part of the government system of the National Financial Inclusion Policy and others related to financial inclusion, respecting their autonomy and competencies.

Article 5.- Government System.- The National Council for Financial Inclusion Coordination (CONCIF) is created as the government system of the National Financial Inclusion Policy and for inter-institutional coordination, which will have the technical support of Working Groups and the administrative support of the Executive Secretariat.

Article 6.- National Council for Financial Inclusion Coordination.- The National Council for Financial Inclusion Coordination will have as its purpose to promote policies, norms, and actions to foster financial inclusion, for which effect it will coordinate with public and private institutions and organisms, respecting their autonomy and competencies.

Article 7.- Composition of CONCIF.- CONCIF will be integrated by the following public institutions and organisms, within the scope of their autonomy and competencies, who will act with voice and vote, through their highest authority or their permanent delegate:

1. Financial Policy and Regulation Board, which will preside over it;
2. Monetary Policy and Regulation Board;
3. Central Bank of Ecuador;
4. Ministry of Economy and Finance;
5. Ministry of Education;
6. Ministry of Economic and Social Inclusion;
7. Ministry of Telecommunications and Information Society;
8. Superintendence of Banks;
9. Superintendence of Companies, Securities, and Insurance; and,
10. Superintendence of Popular and Solidarity Economy.

Prior to request, authorization, or invitation from the Presidency of CONCIF, other public or private institutions or organisms may become part of CONCIF, with voice, but without vote.

Article 8.- Attributes and Responsibilities of the Council.- CONCIF will have the following attributes and responsibilities:

1. Foster mechanisms of articulation, dialogue, and cooperation with national and international specialized organisms on financial inclusion issues;
2. Establish and execute joint cooperation activities that contribute to the fulfillment of the objectives and purpose of the Policy;
3. Establish mechanisms for information exchange that contribute to the fulfillment of this Policy;
4. Motivate the performance of studies by public and private institutions and organisms in the scope of financial inclusion in the country;

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Address: Av. Amazonas between Pereira and Unión Nacional de Periodistas Governmental Financial Management Platform. Yellow Block, 5th Floor | Postal Code: 170507 | Quito - Ecuador |

5. Approve the Action Plan consolidated by the Executive Secretariat; as well as indicators and goals of the monitoring and evaluation mechanism of the ENIF;
6. Review any proposal that arises from the Working Groups and put it in consideration of the competent public institution or organism;
7. Establish mechanisms for the socialization of financial inclusion;
8. Manage the cycle of the National Financial Inclusion Policy and its management instruments, the results of which will be made known to the Financial Policy and Regulation Board;
9. Promote a legal framework that adapts to international best practices related to financial inclusion;