“Driving policy for optimal impact” was the theme of the fifth Alliance for Financial Inclusion (AFI) Global Policy Forum (GPF), held in Kuala Lumpur on the 11 and 12 of September. AFI is a network of central banks and other financial sector authorities from 89 developing countries and emerging markets who have committed to increase financial inclusion.
The 2013 GPF culminated with the announcement of the Sasana Accord: AFI members agreed to measure the progresses made on financial inclusion based on a common framework of indicators, and to make the reports public on a yearly base.
The Forum was opened by Bank Negara Malaysia’s Governor Dr. Zeti Akhtar Aziz, who underlined the importance of pursuing financial inclusion. The Governor emphasised that the financial sector reforms designed in response to the financial crisis should not have unexpected consequences for developing countries’ efforts to broaden access to financial services. Governor Zeti pointed out the importance of strengthening the linkages between financial and economic development by designing policies that protect the soundness of the system as well as each single consumer. To achieve this, Dr. Zeti said the concept of proportionality that underpins global standards must be understood by national regulators and replicated in the design of all country policies that aim to achieve financial inclusion, stability, integrity, and consumer protection (the I-SIP objectives): innovation should be pursued while preserving the safety of vulnerable groups, sustainable economic growth and development.
Governor Zeti also set some of the key questions of this year’s GPF: What is the evolving role of non-bank financial institutions? How they can contribute in sustainable way to financial inclusion? What is a proportional regulation that could enable their potential?
During the opening ceremony participants were also addressed by the co-chair of the Bill & Melinda Gates Foundation, Bill Gates, and by Her Majesty Queen Máxima of the Netherlands. Queen Máxima reminded the audience of the importance of financial inclusion to enable larger goals such as poverty reduction and women’s empowerment. She also stressed the importance for the regulators of the evolution of the conceptualization of the I-SIP objectives as goals that are not only compatible, but mutually reinforcing. “Today the priority is to implement proportional and risk-based regulations. The Financial Action Task Force (FATF) has made financial inclusion part of its work and recognized exclusion as a risk for integrity. The new standards need now to be widely implemented,” she said (see her full speech).
In a recorded video message, Gates highlighted the importance of the paradigm shift from cash to digital, and the need to provide the poor with the appropriate financial tools to take full advantage of the assets they have, using innovation to increase the value of those assets (see his full speech). Above all, he stressed the magnitude of the mobile opportunity: “If today we could build payments systems from scratch, we would build them digital.”