2012年-世界发展银行全球_Armenia___Diagnostic_Review_of_Consumer_Protection_and_Financial_Literacy_Volume_1_Key_Findings_and_Recommendations_40页_501kb

Summary of the Diagnostic Review of Consumer Protection and Financial Literacy in Armenia

Core Content

This document presents a Diagnostic Review of Consumer Protection and Financial Literacy in Armenia, conducted by the World Bank in June 2012. It assesses the current institutional, legal, and regulatory framework for consumer protection and financial literacy, comparing it with international good practices. The review outlines key findings and proposes recommendations for improving the framework and enhancing consumer confidence in the financial sector.

Main Objectives

1. Assess the existing financial consumer protection framework in Armenia, comparing it with international standards.
2. Provide recommendations to improve consumer protection and financial literacy in the country.

Key Findings

• Financial sector in Armenia is relatively shallow, with low financial inclusion. Total credit to the private sector is only 28% of GDP, and household debt is 12% of GDP.
• Financial literacy is low among the population, with only 17% of adult Armenians having an account with a formal financial institution in 2011.
• Consumer confidence is limited, with 71% of respondents in the 2008 USAID survey citing a lack of confidence in the banking sector.
• Consumer protection is primarily handled by the Consumer Protection and Market Conduct (CPMC) Division of the Central Bank of Armenia (CBA), which is responsible for monitoring and regulating financial institutions.
• The CPMC Division is under-resourced, with only four staff members, and needs to be strengthened with better staffing and supervisory tools such as mystery shopping.
• Consumer organizations are currently lacking in Armenia, and there is a need for their development to support the CBA in market monitoring.
• Self-regulation through codes of conduct is encouraged, but it should complement, not replace, government regulation.
• Consumer disclosure is inadequate, and financial institutions should be required to provide clear, standardized, and comparable information to consumers.
• Dispute resolution mechanisms are present, but the Financial System Mediator (FSM) should be expanded to include sole entrepreneurs and small businesses.
• Advertising needs to be regulated to prevent misleading practices, with a focus on using APR instead of nominal interest rates for consumer credit.
• Financial education is seen as a long-term strategy to improve consumer behavior and confidence, and a multi-stakeholder program should be developed involving the CBA, government, financial sector associations, and NGOs.

Key Recommendations

• Strengthen the institutional framework for consumer protection and financial literacy by providing adequate resources and modern supervisory tools.
• Improve consumer disclosure by requiring financial institutions to provide clear, standardized, and comparable information in all marketing and sales materials.
• Develop regulation of business practices to ensure fair treatment of consumers, including regular training and testing of sales agents.
• Upgrade dispute resolution mechanisms to include sole entrepreneurs and small businesses, and ensure regular analysis of complaints by financial institutions.
• Establish a multi-stakeholder financial education program that includes both in-school and community-based initiatives, and ensure that it is rigorously tested and evaluated.
• Create a Steering Committee for the National Strategy of Financial Education to coordinate public and private efforts and evaluate the effectiveness of financial education programs.

Financial Sector Overview

• The banking sector has seen significant growth in assets and loans, with total assets reaching 44.5% of GDP in 2010 and loans reaching 27.1% of GDP.
• Consumer lending is heavily dollarized, with over 62% of all loans in foreign currency (FX) by the end of 2011.
• Insurance sector is underdeveloped, with only nine non-life insurance companies active, but has seen growth due to the introduction of mandatory motor third party liability (MTPL) in 2010.
• Equity market has remained flat since the 2008 crisis, with little growth in mutual funds or pension funds.
• Non-bank credit sector has grown significantly, with total loans increasing from 58,424 AMD million in 2008 to 70,286 AMD million in 2011.

Conclusion

The review highlights the need for a stronger institutional and regulatory framework to support consumer protection and financial literacy in Armenia. It emphasizes the importance of transparency, choice, redress, privacy, and trust in the financial system. While progress has been made, particularly in regulatory areas, systemic weaknesses in financial inclusion, consumer confidence, and financial education remain. A coordinated, multi-stakeholder approach is necessary to address these challenges effectively.