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Adam Mooney is the CEO of Good Shepherd Microfinance, Australia’s largest microfinance organization.
As the first day of spring arrives in the Southern Hemisphere, we see new buds emerging, fresh blooms, and a new sense of hope and optimism. In Perth, Western Australia, the Global Partnership for Financial Inclusion (GPFI) meets Monday, September 1 at a forum to stimulate, coordinate, and reflect on action to bring about financial inclusion. I am hopeful as the GPFI prepares recommendations for the G20 meeting in Brisbane in November this year, it will commit to powerful actions to boost the well-being of at least 2.5 billion people living in poverty around the world.
There is clear evidence that improving the economic well-being of the poorest third of the world’s population will have a profoundly positive impact on all people. Economic mobility and resilience at the family and community level directly leads to increased security, human connectedness, and hope for everyone. It also enables self-directed action to realize one’s own dreams and aspirations, however modest, leading to overall contentment. Yet despite such a compelling economic and social case, poverty and inclusion remain ideologically contested concepts where causality is often polarized into either inadequate human behavior or opaque environmental factors.
Speaking at the C20 Summit last month, I suggested that targeted inclusive finance around the world can and will be a key driver of economic growth, especially through production, employment, and education. It is not a coincidence that the number of people living in poverty is the same as those that are unable to access appropriate financial services, as measured by the World Bank’s Findex reports. These reports state that only half the world’s adults have bank accounts and of those, only 15 percent believe that their needs are understood and met by the products they have access to.
> Posted by Amanda Lotz, Financial Inclusion 2020 Consultant, CFI
The Group of Twenty Finance Ministers and Central Bankers (G20) is targeting financial inclusion through the G20 Development Working Group (DWG), which is in the process of finalizing an agenda for its 2014 goals. The DWG focuses on developing an agenda for tackling development challenges, with the intent to remove constraints to sustainable growth and poverty alleviation. Recently, through our participation in InterAction’s G20/G8 Advocacy Alliance, CFI teamed up with other non-profits in the financial inclusion community to develop a set of recommendations for G20 leaders. While the Alliance and DWG span a diverse range of issues, our focus was, of course, on financial inclusion.
Our recommendations to the G20 were developed in coordination with CARE International UK, the Grameen Foundation, the Cherie Blair Foundation for Women, HelpAge USA, and the Microcredit Summit Campaign, among others. They urge governments to implement national strategies for financial capability and client protection, ensuring that these strategies and targets address a full suite of financial services and include underserved groups. You can read the full set of recommendations and contributing organizations here.
Last week we had the opportunity to discuss our recommendations with senior leadership from the Australian G20 presidency. As you may know, the G20 Presidency rotates each year, and this is Australia’s year. Each presidency takes a lead in setting the agenda and priorities, which are then discussed and (ideally) implemented by all G20 members.
The G20 Australian presidency issued a global development agenda, which was supported by the DWG. It highlighted two major outcomes for 2014 related to financial inclusion and remittances. We were happy to see an expressed desire to move beyond a focus on cost reduction for remittances, where there has been a great deal of progress, to maximizing the potential of remittances to increase financial inclusion.
During the meeting, our financial inclusion team brought three key points to the conversation: Read the rest of this entry »
> Posted by Sonja E. Kelly, Fellow, CFI
Remember when you were young, and a sandbox presented an opportunity to build your own castle? The GPFI (the Global Partnership for Financial Inclusion) Basic Set of Financial Inclusion Indicators and its accompanying website is kind of like that—it offers a space in which users can customize and test their own definitions of financial inclusion through an interactive platform, building off of a set of key “ingredients” in the data world.
We’ve talked before about the GPFI’s “Basic Set,” but we wanted to be sure to highlight it again, given the attention that it has received over the past few weeks alongside its official release on April 21 at the 2013 World Bank Spring Meetings.
In offering this service, the GPFI addresses one of the biggest challenges in financial inclusion: measurement. We all seem to have a general definition of financial inclusion, but when it comes to operationalizing this definition, things get complicated. Should the use of financial services be an individual or a household measure? How can we parse out (and should we parse out) financial tools used for businesses from tools used for personal things? Are surveys run by international organizations the best source of data or are numbers reported by central banks more reliable? The Basic Set remains fairly agnostic on these questions, instead giving highlights from all of the data—SME, personal, supply-side, demand-side, international organization-led, and government-reported.
See, for example, the diversity of indicators in the GPFI Basic Set as applied to sub-Saharan Africa. “Accounts” includes a demand-side (individual) measure of accounts, SME accounts, and both measures for women in particular. Read the rest of this entry »
> Posted by Sonja E. Kelly, Fellow, CFI
The G20’s Global Partnership for Financial Inclusion (GPFI) has just unveiled a “Basic Set” of indicators that help to solve the problem of how to measure financial inclusion. Their associated data portal will soon be available, too. This indicators release is timely—it corresponds to a massive increase in the amount of data that we have on financial inclusion, and it fills a need in the industry to define what we mean when we say “level of financial inclusion” in a measurable way.
The release also coincides with our own internal discussions here at the Center. Around the coffee pot, after meetings, and in blog posts, we have been wondering how to objectively measure and track financial inclusion. Beth Rhyne discusses the inadequacies of just using account penetration in her blog post “What’s Wrong with ‘Banking the Unbanked’?.” Ignacio Mas posits “Mobile Money as a (Payment) Planning Tool,” a use that is not tracked in the headline indicators of available data. Leora Klapper’s “We Bring You… DATA!” underlines how critical demand-side data is to complement supply-side data-gathering efforts.
While the Global Partnership for Financial Inclusion does not solve every measurement problem, it certainly is a great start. The “Basic Set” covers five indicators, each measured in multiple ways: individual accounts, individual credit, small and medium enterprise accounts, small and medium enterprise credit, and branch penetration. Read the rest of this entry »
> Posted by Susy Cheston, Senior Advisor, CFI
The Financial Inclusion 2020 campaign at the Center for Financial Inclusion at Accion is building a movement toward full financial inclusion by 2020. Accordingly, this blog series will spotlight financial inclusion efforts around the globe, share insights coming out of the creation of a roadmap to full financial inclusion, and highlight findings from research on the “invisible market.”
The Financial Inclusion 2020 campaign begins with an audacious premise: that it is possible, if all the stars align, to achieve full financial inclusion for all with quality financial services by the year 2020. Yes, that would take quite a few stars to line up perfectly, but here are my top seven reasons for optimism as we work to advance inclusion.
1. There are more mobile phones than toothbrushes in the world today.
Bad news for dental health, but good news for billions of previously excluded clients who have access to a device that can include them in financial services if the mobile money folks play their cards right. With mobile subscriptions exceeding 86 percent of the global population, there is great promise if providers can figure out the business models.
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