The Alliance for Financial Inclusion (AFI), along with the leadership of the G20, spoke up for the cause of financial inclusion long before it became fashionable. In fact, since the 2010 Seoul Summit in the Republic of Korea, the G20 has worked with AFI in advocating for financial inclusion on a global stage, helping move the issue from the fringe to the mainstream on the international agenda. The positive impact of financial inclusion has become undeniable, in part because of these voices.
It is heartening to see that, under China’s Presidency, the Global Partnership for Financial Inclusion (GPFI) will continue to build on the financial inclusion agenda items of former Presidencies and support the implementation of the G20 Financial Inclusion Action Plan. These efforts will involve a focus on digital financial services, data and indicators, financial literacy, consumer protection, SME finance, and reaching particularly vulnerable groups such the rural, poor, youth and elderly.
Development actors have now realized they will not have the impact they seek until we reach every person who remains unbanked or underserved. Because of this, the international community, more than ever, is throwing its full weight behind the cause to scale up financial inclusion.
Last year, the United Nations General Assembly adopted the Addis Ababa Action Agenda (AAAA). The document outlined a robust case for the role of financial inclusion to the development agenda, committing the international community to work toward full and equal access to formal financial services for all, adopting and/or reviewing national financial inclusion strategies in consultation with relevant stakeholders, and naming financial inclusion as a policy objective in financial regulation in accordance with national priorities and legislation.
This recognition reflects the convergence of development work around financial inclusion, resulting in a divergence of complex and cross-cutting inclusive financial approaches and components to solutions for climate change, the gender gap, farming solutions, and more. There is a risk, however, that an uncoordinated effort will entangle the best intentions of international actors.
Yet there is a clear road map to success: Smart policy.
AFI’s network of more than 100 central banks and financial regulatory authorities from over 90 developing nations is working together to bring smart policies to life through peer-to-peer learning and knowledge sharing while championing a bottom-up approach—a fact acknowledged in the Addis Ababa Action Agenda, which singled out AFI as the ideal partner for facilitating these poly-lateral exchanges between countries and regions across the globe.
Representing 85 percent of the world’s unbanked, AFI members have already affected 132 policy initiatives aimed at increasing financial inclusion across the globe. Half a billion people have for the first time opened bank accounts, among other achievements.
It is clear there is a need for practical solutions and country-led specific actions. Emerging and developing countries will assume an important role in driving progress. Implementing a peer-to-peer, country-led approach across the development field will undoubtedly encourage stronger ownership and provide opportunities for countries to set targets that will be most relevant for their own circumstances.
Now that financial inclusion is firmly in the international spotlight, there is an opportunity for the G20 to provide guidance and pave a path over the next 15 years as we all aim to achieve the UN Sustainable Development Goals, which will result in billions coming out of poverty. China’s leadership comes at a key moment, it seems.
ABOUT THE AUTHOR
Chris Hughes is the Communications Manager at the Alliance for Financial Inclusion. Follow him on Twitter at @chughes222.