An interview with Gernaldo do Rosário, Director of the Financial Inclusion Department, Banco Central de São Tomé e Príncipe

How have financial inclusion levels in São Tomé and Príncipe evolved in recent years?

Between 2017 and 2025, the country moved from a low (0.24) to a moderate level (0.41) on the Financial Inclusion Index (IFI). We saw significant improvements in financial literacy, savings behavior, and in tackling the gender gap. However, actual access to bank accounts stagnated (even slightly declined), digital adoption remains very low (24%), and small businesses continue to be largely excluded (only 18-21% banked).

Financial access and usage (2017 → 2025)

Indicator	2017	2025
Bank account ownership	39%	38%
Financial literacy	39%	72%
Regular savings	47%	70%
Gender gap (accounts)	20 p.p.	4 p.p.
Small businesses with bank accounts	–	18-21%

What are the main barriers to inclusion?

Some are structural or economic: we have low incomes and high banking costs, while a lack of collateral means that 55% of small-business loan applications are rejected. Other barriers are behavioral/cultural: 76% of adults prefer to save their money at home, while 43% of small businesses consider a bank account unnecessary. We see a gap between attitudes and behavior – 94% of people consider a bank account as important (up 6% from 2017), but actual account ownership remains stuck at 38%.

Supply and quality issues also come into play. There’s an overall low (48%) level of satisfaction with financial products, and while 78% of people own a mobile phone, only 24% have adopted digital financial services. The high informality of small businesses (82% are unregistered) and a weak consumer protection framework also constitute barriers to inclusion.

For Banco Central de São Tomé e Príncipe (BCSTP), tackling these barriers is a strategic priority. We see financial inclusion as an essential mechanism for fighting poverty and enabling vulnerable populations to participate in economic and social development.

The BCSTP, through its Financial Inclusion Office (Gabinete de Inclusão Financeira), conducted demand-side surveys (2017 and 2025) and leads the formulation and implementation of the National Financial Inclusion Strategy (NFIS) 2021-2025, via a multi-stakeholder structure (the National Council for Financial Inclusion – CNIF).

How does financial inclusion support your core mandate of ensuring price and financial stability?

The connection is strong and mutually reinforcing. Financial inclusion directly supports price and financial stability in a number of ways. It reduces informality, which is a key source of instability which reduces the effectiveness of monetary policy and makes the financial system opaque. By bringing individuals and businesses into the formal financial system, we increase transaction traceability, improve the transmission of monetary policy, and enhance our ability to supervise and regulate financial flows.

The NFIS explicitly prioritizes Digital Financial Services (DFS), interoperability, and digitalization of government payments (G2P/P2G). When more transactions occur digitally, we gain better visibility over money velocity, and can implement monetary policy more effectively.

Poor financial behavior leads to poor risk management by consumers (33% spend unexpected income rather than save), whereas more literate consumers make better borrowing, saving, and investment decisions, reducing the risk of defaults, over-indebtedness, and systemic shocks to the financial system.

Financial inclusion also promotes stability by reducing vulnerability to shocks. When households and small businesses have access to formal savings, insurance, and credit, they are less likely to default or fall into distress during crises, which protects the stability of financial institutions.

How are you working to expand women’s financial inclusion?

In São Tomé and Príncipe, women play a vital role in the economy, managing 61% of small businesses. Our NFIS has a pillar on Women’s Financial Inclusion, with initiatives around:

• Dedicated Credit Lines & Financing – including credit guarantee funds, reduced and accessible interest rates, and lower fees. We have implemented quotas for lending portfolios allocated to women.
• Innovative Savings Mechanisms – developing formal savings products inspired by traditional informal mechanisms, to make formal saving more attractive and accessible to women.
• Business Incubators – creating business incubators for women, and simplifying procedures to create small, women-owned businesses.
• Gender-Disaggregated Data – requiring mandatory collection, analysis, and use of gender-disaggregated data by financial institutions.

Why is inclusive green finance a priority for BCSTP?

Climate change is not a future environmental problem – it is a present economic reality that disproportionately harms the the most vulnerable. In São Tomé and Príncipe, extreme weather events and the degradation of natural resources is affecting key sectors like agriculture and fisheries, destroying assets and impacting livelihoods.

For a central bank, this matters. When farmers, fishers, and small business owners cannot recover from climate-related losses, loan defaults increase, savings are depleted, and the stability of financial institutions is tested. We see financial inclusion as vital in building vulnerable groups’ resilience to climate impacts, whether via insurance to buffer against extreme weather events, credit to invest in climate-adaptive activities, or savings to smooth consumption after a climate shock.

The NFIS action plan includes activities around:

• Mandating financial institutions to allocate a % of credit to climate adaptation/mitigation
• Interest rate subsidies for activities like recycling, sustainable construction, and clean energy
• Green financial products – credit lines, guarantee funds, savings solutions, and insurance for environmentally sustainable activities
• Mandatory collection and analysis of green finance data
• Regulatory framework for managing climate risks in the financial sector

What are you doing to bring excluded groups into digital financial services?

The BCSTP is working to transform DFS from an embryonic market into an inclusive, safe, and robust ecosystem. Key initiatives include:

• Regulatory Sandbox for FinTech Startups – in 2025, BCSTP launched an incubator to support entrepreneurs with innovative technology-based financial ideas
• Implementing interoperability requirements for all market players to improve speed, access, and reduce transaction costs
• Expanding the Dobra24 network (domestic interoperable retail payment infrastructure)
• Providing guidance on remote KYC processes to allow migrants and excluded groups to open accounts from abroad
• Leveraging microfinance institutions (MFIs) to terminate remittances, improving access for low-income populations in rural areas.

How are you working to protect consumers, and to keep them safe from fraud?

The NFIS recognizes that consumer protection and financial literacy are essential to reducing vulnerability. Planned actions under the NFIS include integrating financial education into school curricula, establishing a Consumer Ombudsman for financial services dispute resolution, adopting a code of conduct for financial service providers and implementing a legal framework for consumer rights protection.

The target is to raise the percentage of adults satisfied with financial service provider treatment from 59% to 65%, and increase consumer protection levels.

Through AFI’s Digital Financial Services Working Group (DFSWG), BCSTP is contributing to developing policies that help regulators monitor fraud risks and protect consumers. The SPACE framework (developed by DFSWG) provides structured approaches for data utilization in supervision and market intelligence.

Why is SME financial inclusion such a priority?

Small businesses play a vital role in our economy, but our Demand-Side Survey revealed a number of critical challenges:

• 82% of MPEs remain outside the formal banking system
• Only 21% of MPEs have a bank account (and not always in the business’s name)
• Women manage 61% of MPEs, but face disproportionate barriers
• 95% of MPE managers did not complete basic education
• 87% of MPEs consider lack of financing the main obstacle to business success (up from 40% in 2017)

In consequence, all four pillars of the NFIS (Digital Financial Services, Women’s Financial Inclusion, Inclusive Green Finance and Consumer Empowerment & Financial Literacy) contain dedicated actions to target MSMEs.

Looking forward, what will your priorities be for the next few years?

We aim to consolidate progress by continuing and adjusting current measures while implementing new ones. Priorities will include: increasing stagnated account ownership, converting high literacy into better financial behavior, boosting low digital adoption, formalizing excluded small businesses, improving low client satisfaction, and strengthening consumer protection. A new national financial inclusion strategy will be developed to guide these efforts.