A new international working group made up of expert policymakers and supervisors from central banks and supervisory bodies in developing and emerging countries has been launched in Kuala Lumpur, Malaysia, to enhance efforts to increase access to financial services for the poor.
The working group will focus specifically on the issue of improving national-level collection and use of financial inclusion data – a critical but often lacking element for financial inclusion policy development and implementation.
The launch of the working group was the culmination of a two-day international workshop on financial inclusion data hosted by the Bank Negara Malaysia (BNM) and AFI that brought together Central Bank policymakers from some 10 countries. Welcoming the launch of the working group, BNM Deputy Governor, Dato’ Muhammad Ibrahim encouraged the Working Group to consider, in the longer term, the development of a composite financial inclusion index: “The composite index will benefit everyone by providing a broad measure of trends, facilitate comparisons between distinct segments and create a benchmark for policy work in financial inclusion. It can eventually help to popularize the notion of financial inclusivity, and in that way help garner more global support for financial inclusion initiatives the world over.”
Availability of reliable data is critical to policymakers’ efforts to make access to financial services a policy priority. Data provides a fundamental basis to the development and implementation of policy that ensures affordable and accessible savings, money transfers, credit and financial literacy training that are vital to the economic health of households.
Absence of reliable data – a reality in many developing countries – poses a major obstacle to informed decision making on policy as well as to monitor the progress of financial inclusion initiatives at the national level. Without improved national data, financial inclusion enters a vicious cycle – no data means it is difficult to have a complete picture of the situation in the country, which in turn can result in lack of political awareness and few subsequent actions being taken.
“Gathering data is an opportunity to improve inter-agency coordination among agencies that could promote financial inclusion in a country,” said Raul Hernandez-Coss, Director General for Access to Finance, National Banking and Securities Commission of Mexico and AFI policy champion on financial inclusion measurement and data.
The working group was launched under the auspices of the Alliance of Financial Inclusion (AFI), a community of Central Banks and regulatory authorities from some 50 developing countries. The forming of the group comes in response to requests by its members for a platform to explore the topic of financial inclusion data further and share expertise to build the capacity within the AFI network in data methodologies and approaches aimed at creating evidence-based policy.
“With this working group, developing country policymakers are taking the lead to come together, share experiences and build solid knowledge that can be shared widely with others countries and provide the evidence base for policy decisions to ensure increased access to financial services for the poor,” said AFI Executive Director Alfred Hannig, noting countries such as Thailand and Mexico where important strides in data development have already been made and whose experience AFI is sharing through its network of policymakers.
Together the representatives from a rich variety of countries – including Brazil, Burundi, Indonesia, Kenya, Uganda, Malaysia, Mexico, Nigeria, Peru, Philippines and Zambia – are focusing on knowledge exchange through dynamic discussions on financial inclusion data, with the purpose of identifying common framework for defining financial inclusion, extracting knowledge and lessons learned in data collection methods and using data to inform policy. The group will explore possibilities of establishing a set of common global indicators and basic standards for financial inclusion surveys and data collection.
Policy specialist on expanding financial services to the poor and workshop facilitator David Porteous said: “Among the growing number of international initiatives to measure financial inclusion in different ways, this working group brings a new and useful perspective: that of the regulators and policy makers themselves, in those countries for which financial inclusion is accepted as a policy priority. “
The Working Group is due to present its mandate and initial discussions at the 2nd AFI Global Policy Forum, to take place in September 2010.
Notes to editors:
- Research has shown that better access to financial services can fuel economic growth by raising national income via increased savings and investments in poor households as well as in small and medium enterprises. This access also enhances financial stability by injecting formal savings into the system, diversifying the capital base, and providing stability during global downturns. Yet, an estimated 2.5 billion people – over half the world’s adult population – do not have access to savings accounts and other financial services.
- AFI is a global network of policymakers from central banks and other financial inclusion policymaking bodies in developing countries. AFI provides its members with the tools and resources to share, develop and implement their knowledge of financial inclusion policies. We connect policymakers through online and face-to-face channels supported by grants and links to strategic partners, so that policymakers can share their insights and implement the most appropriate financial inclusion policies for their countries’ individual circumstances. For more information please go to: www.afi-global.org.
For more information, please contact:
Beth Magne-Watts |Alliance for Financial Inclusion (AFI) | m +66 (0)81 916 7300 | e beth.watts@afi-global.org
Lara Gidvani |Alliance for Financial Inclusion (AFI) | m +66 (0)84 700 8753 | e lara.gidvani@afi-global.org