Financial Services for the World's Poor in the Face of Global Financial Crisis H...

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Nov 2008
Doha, Qatar, November, 29 2008 - The UN Advisors Group on Inclusive Financial Sectors - a group of 25 experts assembled by the UN to advise the organization and its member states on issues related to microfinance - recommended today a course of action to UN Secretary-General Ban Ki-moon to reach 2.1 billion worldwide who lack access to the most basic financial services.

The group participated in a panel discussion to highlight the role of microfinance in mobilizing financing for devlopment as part of the International Conference on Financing for Development in Doha on 29 November 2008.

The impact of the current global financial crisis on the world's poorest populations and their ability to access a broad range of financial services--secure savings, health or crop insurance, remittances and affordable credit--was highlighted at the International Conference on Financing for Development in Doha, Qatar today. The UN Advisors Group on Inclusive Financial Sectors (UNAG)--a group of 25 high-level experts assembled by the United Nations to advise the organization and its member states on issues related to microfinance--presented Secretary-General Ban Ki-moon with concrete recommendations on how to expand financial services to the world's 2.1 billion "unbanked."

Removing systemic barriers that exclude low-income consumers from the world's financial systems is seen as a fundamental step in the process of eradicating poverty, building wealth at the national level, and mobilizing domestic resources for development. These issues are central to discussion at the Doha Conference convened to review the progress on the implementation of the Monterrey Consensus.

"My fellow Advisors and I are firmly convinced that inclusive finance is the fundamental platform from which individuals and nations can achieve equitable prosperity," said HRH Princess Máxima of the Netherlands, UN Advisor and Chair of the Advisor's Group Advocacy Committee. "'Financial Inclusion for All' is a call to action that we must all embrace."

The UNAG's recommendations focus on the role of governments, regulators, the private sector and development partners in promoting and advancing inclusive financial services and integrating efforts and resources across industry sectors for development and poverty reduction. Approximately two billion people still lack access to even the most basic financial services, such as a secure bank account, simple life insurance or safe ways to transfer money.

"Access to a diverse range of financial products and services can directly provide individuals and families with the tools to generate income, build capital, and properly manage unexpected risks, all of which provide them with the wherewithal to pave their own way out of poverty," said H.E. Mr. Marc Bichler, Ambassador and Director of Development Cooperation, Luxembourg and Chair of the UNAG.

UN Advisor and Managing Director of Micro-Credit Ratings International Limited (M-CRIL), Sanjay Sinha, situated inclusive finance within the global economic context. "The current economic crisis renders financial inclusion more important than ever before," said Sinha. "The "unbanked" are not subprime. In fact, low-income households make good, reliable banking clients if banks approach them with appropriate products and practices. And their inclusion will reap real economic dividends for communities and countries alike."

The UNAG's recommendations note the importance of cross-sector coordination in creating successful inclusive financial systems and extending access and the opportunity it provides to the world's poorest populations.

Secretary-General Ban Ki-moon stated, "I am grateful to the UN Advisors for leading the way. Your key messages to governments, regulators, development partners and the private sector provide a tangible framework for action.

I am sure that many organizations and institutions would get involved if only they knew how. These messages provide a clear direction."

The UNAG key messages also note:

Governments should promote access for all citizens to a broad range of financial products and services, embrace new technologies and delivery channels, create helpful policy environments, reject interest rate ceilings that limit credit expansion, and promote consumer protection, transparent prices, financial education and an open, competitive market.

Regulators should establish conditions that allow a diverse range of institutions to provide financial services, enable appropriate supervision for financial services providers and their supporting industries, and mitigate risk and balance concerns of safety without limiting access.

Development partners should build human and institutional capacity to meet funding needs, support the range of financial institutions that are apart from inclusive financial sectors, and monitor the financial and social performance of development-partner investment portfolios.

The private sector plays an important role in expanding access and should realize the market opportunities, engage at the executive level, and forge partnerships with both the financial sector and businesses that support the financial services industry.

The full text of the UNAG key messages, as well as additional resources and information about the UNAG and inclusive finance are available at www.UNadvisorsgroup.org.

Following a panel discussion on "Mobilizing Domestic Financial Resources for Development: The Role of Microfinance," organized in partnership with the United Nations Capital Development Fund (UNCDF), several of the 25 advisors presented the Secretary-General with the group's final statement in a brief ceremony that marked the conclusion of the group's two year mandate. Panel participants included: H.E. Mr. Bichler; H.E. Mr. Bo Jerlström, Ambassador, Sweden and UN Advisor; Dr. Jeanette Thomas, Communications Director, CGAP; Dr. James Mwangi, President and CEO, Equity Bank (Kenya) and UN Advisor; and Mr. Sinha. The panel was moderated by Mr. David Morrison, Executive Secretary, United Nations Capital Development Fund (UNCDF).



 

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