The Push For Global Financial Inclusion
The UNSGSA defines financial inclusion as universal access to, and use of, to a wide range of reasonably priced financial services, provided by a variety of sound and sustainable institutions.
Today, 2.5 billion adults—more than a third of the world’s population—are excluded from the formal financial system. Financial exclusion is greatest among poor people and in emerging and developing countries, including the rural households that account for more than 70% of global poverty. This hampers people’s ability to earn, protect themselves in times of crisis, and to build for the future. In addition, more than 200 million formal SMEs in emerging markets alone lack access to finance, limiting their ability to grow and thrive.
Financial inclusion is an enabler and accelerator of economic growth, job creation and development. Affordable access to, and use of, financial services helps families and small enterprise owners generate income, manage irregular cash flow, invest in opportunities, strengthen resilience to shocks, and work their way out of poverty.
A purpose of financial inclusion is to help people and communities meet basic needs such as nutritious food, clean water, housing, education, and healthcare and more by supporting the businesses that provide these services, and enabling clients to have more reliable and affordable access to them. An inclusive financial system is essential infrastructure in every country.
While financial inclusion alone cannot bring people out of poverty, it can help people build better lives. It can help individuals to start businesses, and help small businesses grow into larger ones. Financial services can help small farmers tap into the formal economic system for two-way flow of information and income. Entire economies can grow more quickly and in ways more favorable to poor people.
GREAT STRIDES
Around the world, there is more attention than ever to the ways in which access to financial services accelerate progress toward development—and the persisting needs we still face.
This has spurred a first wave of high-level commitments by governments, international agencies, the private sector, and others to make the vision of financial inclusion a reality. G20 leaders recognized financial inclusion as a cross-cutting issue for development and economic system stability, and included it in work plans. In 2012, 17 countries committed to create cross-sector coordination platforms and national strategies under the G20, and theAFI Maya Declaration has gained over 30 commitments from national regulators and policy makers. Unique partnerships are forming, for example the Better Than Cash Alliance brings together private sector, donors and governments to advance the use of digital channels. ASEAN leaders recognized financial inclusion as a key to inclusive and sustained growth for the region, and global standard setters have incorporated financial inclusion considerations into their guidelines for banking regulation and supervision.
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-Wiki
The Alliance for Financial Inclusion (AFI) is a network of financial inclusion policymakers.
-Wiki
The Alliance for Financial Inclusion (AFI) is a network of financial inclusion policymakers.
AFI's core mission is to encourage the adoption of inclusive financial policies in developing nations, to lift 2.5 billion citizens out of poverty. AFI was founded in 2008 as a Bill & Melinda Gates Foundation-funded project, supported by AusAid, in order to advance the development of smart financial inclusion policy in developing and emerging countries. AFI's network has more than 100 institutions from more than 89 member nations.
AFI utilizes a peer-to-peer learning model to connect, encourage and enable financial policymakers to interact and exchange knowledge on policy initiatives such as consumer protection, mobile financial services, financial integrity, agent banking, formalizing microsavings, data and measurement, and general financial inclusion. AFI has pioneered regional approaches to knowledge exchange among policymakers and stakeholders worldwide, notably within the Pacific Islands, Africa and Latin America. This information interchange is intended to result in the building of a more comprehensive knowledge base on financial inclusion, and the subsequent formulation and implementation of effective policy by members in their home countries. AFI administers several types of financial inclusion policy related activities, including a membership program, the convening of working groups, the provision of grants, and a Policy Champions Program. It also hosts the annual AFI Global Policy Forum (GPF), the most important and most comprehensive forum for regulatory institutions with an interest in promoting financial inclusion policy, and championed the Maya Declaration, the first global and measurable set of financial inclusion commitments by developing and emerging country governments.
AFI is headquartered in Bangkok, Thailand. The Executive Director is Alfred Hannig of Germany, who has held the post since 2008.The organization is financed by the Bill & Melinda Gates Foundation and administered on behalf of its members by the German Technical Corporation and is based in Thailand. The organization has three working languages: English, French and Spanish.
History
The Alliance for Financial Inclusion was founded in 2008 as a Bill & Melinda Gates Foundation-funded project to advance the development of smart financial inclusion policies in developing and emerging countries. Bank Indonesia (BI), Bank of Thailand (BOT), Central Bank of Kenya (CBK), Bangko Sentral ng Pilipinas(BSP), Superintendencia de Banca, Seguros (SBS) y AFP de Peru and Comisión Nacional Bancaria y de Valores (CNBV) of Mexico comprised the core group of six members.
In 2010, the Group of 20 nominated AFI as one of three implementing partners for the Group of 20 Global Partnership for Financial Inclusion (GPFI). In this role, the AFI brings innovative policies for increasing access to financial services from developing countries to the wider Group of 20 forum and helps non-Group of 20 developing country policymakers participate in the GPFI work.
In 2011, AFI members collectively adopted the Maya Declaration, a statement of intent to make financial inclusion a centerpiece of national efforts for poverty reduction and economic stability. More than 30 AFI members then went a step further by announcing specific and measurable commitments. In recognition of these developments, both the G20 and the Group of 24 highlighted the AFI learning model and the Maya Declaration as key steps toward global economic development. (And as recently as April 2013, the G20 has urged members to commit to the Maya Declaration.)
In 2012, at the Global Policy Forum (GPF), members of the AFI Network began a process to transform AFI from a short-term project into a permanent member-funded international organization.
In 2013, AFI reached 100 member institutions overall with the addition of the Central Bank of Trinidad and Tobago.
The Global Policy Forum
The Global Policy Forum (GPF) is organized by AFI as the keystone event for its membership.
The first GPF was co-hosted by the Central Bank of Kenya (CBK) in September 2009 in Nairobi, Kenya, and attracted nearly 100 central bankers and other financial policymakers providing a platform for central banks and other policy making bodies in developing countries to engage in dialogue and share knowledge and experiences in expanding access to financial services. In his opening remarks, the Governor of the Central Bank of Kenya, Prof. Njuguna Ndung'u, summarized the goal of the GPF when he stated: "We will, over the next three days, share experiences on smart financial inclusion policies that have worked elsewhere. We will thereafter adopt these policies to suit our respective countries as we work together to push forward the global financial access frontiers."
Organization
AFI is led by its members and partners, central banks and other financial regulatory institutions from developing countries. The AFI Network includes members from more than 80 countries.
Partner
AFI works with a number of organizations with an interest in financial inclusion, from inter-governmental and standard-setting bodies (SSBs) to development banks, development agencies, research organizations, industry associations and the private sector. AFI partners include the World Bank, United Nations Capital Development Fund, USAID (United States Agency for International Development), World Economic Forum, Russian Microfinance Center, Inter-American Development Bank, GSMA, the Group of Twenty Four (G24), the Group of Twenty (G20), Consultative Group to Assist the Poor, and the Asian Development Bank.
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