AFI members share core strengths, common objectives with developed nation counterparts

At AFI and the Frankfurt School of Finance & Management (FS) “Developing and Developed Country Perspectives on Financial Inclusion: A Global Dialogue” conference on 28 June in Frankfurt, Germany, policymakers from developing and emerging economies met with peers from developed nations to exchange knowledge on specific policy and regulatory domains relevant to their common objectives of furthering financial inclusion.

Supported by the German Federal Ministry for Economic Cooperation and Development, the Hessian Ministry of Economics, Transport, Urban and Regional Development, and the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH, the meeting brought together more than 80 senior policymakers, regulators and financial sector stakeholders to connect AFI members with their counterparts from developed countries and exchange ideas on relevant financial issues, as well as to identify future opportunities for joint activities and mutual learning.

It marked AFI’s first financial inclusion event held in a developed country, showcasing a convergence of the understanding of financial inclusion and financial sector stability. Despite similar challenges, in developing nations financial inclusion is seen as a means to market development while in developed economies financial exclusion often equals social exclusion.

To meet these challenges Bangko Sentral ng Pilipinas (BSP) Deputy Governor Nestor A. Espenilla, Jr. stated, “We at AFI would like to share our core strengths with our counterparts from developing economies, as well as other stakeholders.”

Mr. Espenilla continued: “At the core of AFI is peer learning and knowledge exchange, and this includes a culture of openness and willingness to share. Being one of the founding members of AFI, BSP can say with certainty that the peer learning platform works.”

Central Bank of Kenya (CBK) Governor Professor Njuguna Ndung’u moderated the opening session with a specific focus on financial inclusion success stories from developing economies, and how financial inclusion policy can make a positive impact on overall economic inclusion.

The panel agreed that a sound financial infrastructure helps increase financial inclusion and also emphasized the importance of financial literacy and education.

The second session highlighted how the Standard Setting Bodies (SSBs) and AFI members can best work together to drive financial inclusion policy that is consistent with the financial stability and integrity mandates of SSBs. This confirmed a trend of increased openness amongst the AFI Network and SSBs.

The meeting served as an opportunity to engage in dialogue with representatives from participating SSBs in the wake of the release of AFI’s latest publication “Risks Redefined: AFI Member Proposal for Peer Learning with Standard-Setting Bodies (SSBs) on Extended Risk Frameworks.” The report details the highlights and conclusions of the G24-AFI High-Level Roundtable meeting held during the Spring Meetings of the World Bank-IMF in Washington D.C. in April 2013 to promote dialogue among policymakers, and to consider the role of AFI members and SSBs in meeting financial inclusion objectives. AFI and G24 members agreed to propose the joint development of an extended risk framework with the SSBs, taking full account of the risks for financial and socio-economic stability posed by financial exclusion, including over-indebtedness and inadequate consumer protection.

The final session identified relevant lessons for developing, emerging and high-income economies on the role of policymakers and regulators in small and medium sized (SME) finance. AFI members and representatives from high-income countries learned first-hand about a wide variety of different successful policy interventions in the field of SME finance.

The outcomes from this meeting will help shape discussions at the 2013 AFI Global Policy Forum (GPF) on 10-12 September 2013 in Kuala Lumpur, Malaysia. They also serve as an important step for AFI members and policymakers from developed nations to work more closely together in the development and implementation of smart financial inclusion policy.

“We see changes on the global landscape. The world is moving closer together and what connects us is what we share in this room … that we share in the belief of financial inclusion and we share the power of knowledge,” said AFI Executive Director Alfred Hannig. “We are here to learn from each other. At AFI we don’t use the word development cooperation but rather use the word international cooperation. This comes from the power of knowledge.”