I am happy to be here and to see you all. We have been looking forward to this moment for three years now, and finally it is happening and we are together again.
We can’t deny it. COVID-19 had an impact on our mental well-being. True, there was a lot of initial excitement on the new opportunities the outbreak of the virus had brought to us, for example, the unknown possibilities of virtual connections and the options to work from home. Many people were even very quick to declare a “new normal”. On the other hand, the pandemic had mental impact on generations; even our kids did not socialize for two years in some countries. And we are yet to feel this impact. At the same moment, we should remember those who we have lost along the way because of this disease.
Now as we seem to have overcome the worst of the health crisis the world is still – or again – in turmoil. Scepticism, even pessimism, gloomy outlooks on the future, and ongoing segregation and isolationism have become determinants of the thinking around us, and the war in Eastern Europe is threatening the prosperity of the rest of the World. Of course, we can’t and do not ignore the current developments. However, the mere fact that we celebrate AFI’s reunification at the GPF this week here in Jordan is an impressive signal that our organisation is alive during these daunting times and ready to address the challenges of exclusion that we have ahead of us.
The World needs optimism and the feeling of belonging. AFI stands for both. And it must have been the optimists who have brought us to Jordan.
Just to recall, when we adjourned our GPF in Kigali in September 2019 this Indonesian Gong standing right here in front of us which symbolizes AFI’s GPF journey since its inception, was handed over to the Central Bank of Jordan.
Former CBJ Governor Ziad Fariz, who in 2019 submitted the expression of interest on behalf of CBJ to host the GPF in 2020, maintained the invitation to us throughout the pandemic. We had phone calls in 2020 and 2021, at times when it became clear that the conditions and health protocols would still not allow the holding of the GPF. When I asked former Governor Fariz about his plans regarding the GPF, he would always say “of course we will maintain the invitation. The pandemic is teaching us so many important lessons we want to share with the rest of the World.” These words indeed inspired the theme of this year’s GPF: Moving Forward Together: towards a resilient, inclusive and sustainable future. And it was Governor Al-Sharkas who forcefully maintained the invitation for the third year in a row in 2022. And now we are here under the patronage of His Majesty King Abdullah Ibn Al Hussein.
We submit our sincere appreciation and gratefulness to the Central Bank of Jordan and Jordan as a country!
For sure, we could have held virtual or perhaps even hybrid GPFs since 2019. But we opted against it for a reason: We were aware that we simply can’t virtually simulate what our community is all about. As a matter of fact, we made several attempts to develop a web platform that could potentially create at least some kind of community feeling we are so used to. But we found that to be too challenging, gave up on the idea, and decided to be patient until conditions would allow us to reconnect face-to-face.
Surprisingly, at least for me, the pandemic did not take us apart. Just the opposite, the network became even stronger during this time and members were active in connecting and using the services in best possible ways.
It is therefore not surprising that financial inclusion numbers report progress since the last time we met in Kigali in 2019. According to the recent Global Findex (main and more detailed results will be presented later today by the World Bank), the number of unbanked has come down to 1.4 billion in 2021 while this number stood at 2.5 billion in 2011. Of the additional 1.8 billion financially included during this period, approximately 1.4 billion were from the AFI network. Efforts to increase women’s financial inclusion at a global level have also been successful. The gender gap, which has been stubbornly sticky for a long time, has dropped from 9% to 6% during this Findex period.
It is oftentimes argued that the Covid-19 pandemic proved to be a catalyst to speed-up the implementation of financial inclusion policies.
But what are the most significant policy developments since we last met in Kigali? Among the many developments in the past three years, I would like to focus on four aspects:
First, the experience of the pandemic has demonstrated that digital financial inclusion is an “all weather” policy solution. In good times, it can provide opportunities to transact efficiently, save safely, plan for the future, and create economic opportunities for micro enterprises. In tough times, digital financial inclusion becomes an essential lifeline for vulnerable individuals and communities to receive social transfers and remittances. As a result, many countries took a leap forward in penetration of digital financial services (DFS), which play a role beyond the immediate crisis context.
Digital payments have become the gateway to broader digital finance ecosystems enabling access to savings, credit, insurance and other products. The business case for prioritizing digital financial inclusion policies and infrastructure has become very clear.
Second, in 2019 AFI members demonstrated commitment to include the most disadvantaged groups –women, youth, forceably displaced (FDPs), persons with disabilities and older people – in their financial inclusion strategies – using targeted policies and measures where necessary and making sure to leave no one behind.
Financial inclusion of vulnerable groups has increased measurably as a policy priority for AFI members. Driven by the Denarau Action Plan on gender inclusive finance, the proportion of regulators in the AFI network who indicated that women’s financial inclusion is a high priority increased from 58% in 2021 to 75% in 2022. Youth financial inclusion is a subject of an even stronger prioritization by members, moving from 35% in 2019 to 71% in 2022. We do not have a comparative data for persons with disabilities, but 42% of members rated this as a priority in 2022. The experience of the last three years has reinforced the importance of doubling down on this commitment, as the pandemic exacerbated existing inequalities and hit disadvantaged groups identified in the Kigali statement the hardest. At the same time, members have made impressive progress in implementing the Kigali Statement principles – e.g. through adoption of the Youth Financial Inclusion Policy Framework in 2020, and the FDPs Policy Framework at this GPF.
Third, in the past three years, Central Bank Digital Currencies have moved from a niche interest to the mainstream of central banking, with around 100 Central Banks now actively engaged through research, feasibility assessment, or pilot projects. Nonetheless, only two Central Banks – Bahamas and Nigeria – have so far moved to full national rollouts. This demonstrates that developing countries have moved into the driving seat when it comes to moving forward with CBDC implementation. With AFI Special Report being launched at this GPF highlights, CBDCs hold promise for deepening financial inclusion, but we see that it is not a silver bullet for financial inclusion. To realize its potential, the CBDCs must have inclusion principles intentionally built into the design from the outset, driven by a clear and achievable goal and designed to be fit the purpose. Peer learning amongst AFI members, along with 3D and PPD partners, will be vital to achieving inclusive design in CBDCs.
Fourth, AFI members have been leading the global developments on Inclusive Green Finance and policy developments are underway in several jurisdictions. The update of the Sharm El-Sheikh Accord, decided on by yesterday’s AGM, is an important step toward renewed commitment and action on this topic.
Despite the advancements we have been witnessing, the pandemic has shown that we need to work even harder than before, not only to preserve the gains of inclusion, but also to ensure that the most vulnerable who have been frontally affected by the crisis can make and sustain a living.
Following up on this point, let me take the opportunity to share a few reflections on the necessity to design long-term policy solutions. Many of the challenges we are currently seeing are actually with us for quite some time. Gender gap and gender issues have been there for too long, as are climate change impacts and hardships faced by FDPs or refugees. In these three specific examples of global challenges, the network can claim and document progress,
However, at this Forum we have put Sustainability at the core of our discussion. Sustainability is a term that is naturally associated with a long-term outlook. This calls for policy solutions with a long-term impact, which is an obvious challenge for the Alliance. It is not enough to make only additional efforts on policy development. What is needed are other long-term solutions that can successfully master key critical global challenges.
Addressing this challenge is a shared responsibility and common task. Our platform gives members an opportunity to be side by side with partners and stakeholders. I would therefore like to recognize AFI’s funding partners, all of whom have continued fruitful cooperation with AFI during the challenging period of the pandemic.
o Bill & Melinda Gates Foundation,
o Germany’s Federal Ministry of Economic Cooperation and Development (BMZ)
o Germany’s Federal Ministry for the Environment, Nature Conservation, Nuclear Safety and Consumer Protection (BMUV)
o The Swedish Sida
o The French Development Agency
o Mastercard Foundation
o Flourish Ventures
o The Foreign, Commonwealth & Development Office of the United Kingdom (FCDO)
o The Ministry of Finance of Luxembourg
o The Ministry of Foreign and European Affairs of Luxembourg
o IDRC, Canada
I also would like to acknowledge AFI’s PPD partners – VISA, Mastercard, Vodacom, Home Credit, Thunes, and Celo (pronounced Tselo), as well as our strategic partners such as the World Bank, GIZ, and IMF, among many others.
Many have come to the Dead Sea to be part of this reunification after 3 years of distance. And the willingness to reunite is evident. It is actually the first GPF in AFI’s history when we were forced to turn down registrations from members and partners. While previously, I sometimes had to pick up the phone to encourage the members to complete their registrations, we realized 4 weeks ago that the available space would not suffice to host everyone who had the desire to be with us. This is special.
What is heartening is to realize how seriously everyone who comes to the Forum prepares for the deliverables of each of the delegations. I happened to have a glimpse at an email from one of your high levels to staff and read that the whole delegation is working very hard to make this GPF a success. I am saying this because we oftentimes are fully aware how full our own plate is, but we don’t pay attention how much others are investing to make this an insightful meeting. Thank you very much for all your efforts.
We carry the word “inclusion” in the name of this organization. Our members conceive financial inclusion as one of the key pillars of financial stability. We have seen that progress in financial inclusion can be catalysed by using a cooperation model which is based on open exchange, mutual learning, free flow of information and due respect for each other. Therefore, both the commitment for inclusion as well as the cooperation model are building blocks of the DNA of this organization and make us strong in a post-pandemic world.
“Excellencies, members and partners,
To conclude, the DNA of AFI is embedded in the country where we are right now –Jordan, a small country in size, yet bigger because of its exceptional people, its diversity and unity, and its commitment to the global causes. This image here shows the first and oldest map of the World, made of mosaic and located in Madaba (a mosaic is a surface decoration made by inlaying small pieces of variously coloured material to form a picture or pattern). Here Jordan is the small piece of mosaic which will not be complete without each of the pieces. Something Jordan, and AFI as a network share. We are uniting the small pieces together to make more stable, human, fair, and prosperous societies.
Thank you. I wish all of you a wonderful Forum.