Opening remarks by Norbert Mumba, Deputy Executive Director at the Alliance for Financial Inclusion, at the “How to help SMEs obtain financing bearing in mind issues of growth and sustainability” workshop in Kuala Lumpur, Malaysia on 18 January 2016.

Members and partners,

Ladies and gentleman: Good morning.

It is a great pleasure for me to welcome you here in the wonderful city of Kuala Lumpur to this workshop supporting access to finance for micro, small and medium enterprises. Allow me to briefly express my gratitude to Bank Negara Malaysia for helping organize and co-host this event with us at the Alliance for Financial Inclusion.

It pleases me to see so many of our members in the audience. Today, we have 22 countries from the AFI network represented, all of whom have been instrumental in the drive to transform AFI from its humble beginnings as a project funded by the Bill & Melinda Gates Foundation and managed by the German International Cooperation seven years ago into the world’s first fully-independent and member-owned organization specifically for financial inclusion.

As you are likely aware, we recently celebrated an important milestone on our path to independence — the one-year anniversary of when AFI first opened the doors to our new permanent headquarters here at BNM’s state-of-the-art Sasana Kijang Complex.

This workshop represents exactly the type of capacity building we envisioned would become commonplace at the global home of financial inclusion. It represents an opportunity to further support the ongoing paradigm shift toward peer learning and knowledge exchange, and AFI is very pleased to assume an important role in this new form of dialogue.

The development of our network is representative of the positive impact financial inclusion has had on the world. Today, AFI members are in an even stronger position than ever to help provide the necessary tools for unbanked individuals to build a better future for themselves.

I thank you for your efforts in making this a reality.

Ladies and gentlemen,

Formal MSMEs are responsible for approximately 45% of employment and 33% of GDP in developing economies, and those figures would be far higher if we included the informal sector. As such, MSMEs have a substantial role in overall economic growth, economic stability, employment and job creation, as well as in addressing inequality and poverty reduction in the regions of the world most in need of sustainable inclusive development.

Yet access to finance is widely reported as one of the main barriers to growth for MSMEs. 70% of micro, small and medium enterprises lack any access whatsoever to external finance. Another 15% are under-financed.

Ladies and gentleman,

Smart financial inclusion policy can reduce inequality, contribute to overall sustainable economic development and stability, and is an invaluable part of mainstream economic and development work.

Policymakers and financial regulators have important roles to play in creating a more enabling environment for MSME finance. We must embrace those roles to capitalize on the opportunities in front of us and reap the rewards that invariably result from the promotion of a more inclusive financial system.

AFI members participated in recent work by the G20 Global Partnership for Financial Inclusion which focused on the state of SME finance oriented policies and has documented successful policy approaches in both G20 and non-G20 countries. These could serve as examples to be shared and learned from, as well as become cornerstones to build upon.

Many AFI members have also demonstrated a strong commitment to improving MSME finance through specific, measureable commitments under the AFI Maya Declaration — an initiative that is uniquely driving successful, evidence-based financial inclusion policy solutions unlocking the economic and social potential of the 2 billion people that comprise the world’s unbanked population.

Please allow me the opportunity to quickly recognize three AFI members currently utilizing the Maya Declaration to lead in the area of MSME finance:

• In the Pacific Islands, one of the most unbanked regions in the world, the Bank of Papua New Guinea committed to prioritize realization of the potential of the MSME sector within its national economic strategy, and established several women’s banks to direct credit to the women entrepreneurs who traditionally face even greater difficulties than male-owned SMEs in accessing finance;
• In central Asia, the Royal Monetary Authority of Bhutan committed to take measures to promote microenterprises, specifically focusing on the agricultural sector;
• And in the Middle East, the Palestine Monetary Authority committed to make access to finance for micro, small and medium enterprises a central policy priority, to recognize the importance of sound data to devising effective policy interventions, and is currently in the process of developing an SME database.

Furthermore, AFI members unanimously approved the adoption of the Maputo Accord at the 2015 Global Policy Forum — the most important annual forum for financial inclusion policymakers worldwide — to officially amend the Maya Declaration to include SME finance as a recognized policy priority for the AFI membership within their overall financial inclusion efforts.

The accord acknowledged the important role MSMEs have in driving employment, economic development and innovation. It also demonstrated leadership from our network’s members in another area on the financial inclusion policy spectrum, and continued to prove that the AFI Maya Declaration is financial inclusion’s premier cross-cutting global initiative.

In line with the Maputo Accord, more than 30 AFI members committed to develop specific measures and quantifiable targets for SME finance for inclusion in their Maya Declaration commitments.

These new commitments will be announced to all of our members, partners and stakeholders this September in Fiji at the 2016 AFI Global Policy Forum. There, we will once again come together to address challenges and seek solutions to the pressing issues faced by the world’s excluded.

For those in the audience today who are not aware, the 2016 GPF will be held under the theme “Building the Pillars of Sustainable Development.” I can think of no theme better suited to highlight the importance of our members’ efforts to support access to finance for MSMEs because real sustainable development cannot be achieved when MSMEs are locked out of the financial system.

It is also important to remember that while MSME finance is a key pillar of sustainable development, it is only one pillar. AFI members have a full calendar in 2016 addressing other important policy areas, including digital financial services, national financial inclusion strategies, gender finance, consumer protection and empowerment, and more, in order to build a strong foundation for sustainable development.

For example, in two weeks our African members will convene in Senegal for the 4th Annual African Mobile Financial Services Policy Initiative Leaders’ Roundtable, which will be closely followed by spring meetings for AFI’s working groups and Pacific Islands Regional Initiative, among others.

Ladies and gentlemen,

I know we are all eager to begin this workshop, so let me conclude with a reminder that leadership and learning are indispensable to one another.

I think this idea nicely sums up the core of the AFI network. We are leading the world in driving successful, evidence-based financial inclusion policies, and we are able to do so because of this unique peer-to-peer learning mechanism which makes our network so strong.

This fact was recognized last year after the United Nations adopted the Addis Ababa Action Agenda. The agenda made a robust case for the role of financial inclusion, committing the international community to work toward full and equal access to formal financial services for all, as well as adopting or reviewing national financial inclusion strategies in consultation with relevant stakeholders, and including financial inclusion as a policy objective in financial regulation in accordance with national priorities and legislation.

The agenda also singled out the Alliance for Financial Inclusion as the ideal partner for facilitating financial inclusion peer learning and experience sharing among countries and regions. The UN General Assembly has stated that the full implementation of the Addis Ababa Action Agenda is critical for the realization of the Sustainable Development Goals and targets.

Standing here, I am very humbled by the presence of all of you participating in this workshop. Each of us recognize that until we reach every person who remains unbanked or underserved, in every corner of the world, the development community will not have the impact it seeks.

Members of the AFI network represent a vast majority of the world’s unbanked. In you, I see that we have the right people in the right places poised to continue making a real impact in their lives by breaking down barriers that prevent access to high-quality, affordable and secure financial services for everyone.

Now, our real work begins.

I wish each of you a productive and fruitful week, and encourage all of you to use the knowledge and lessons gained here to promote evidence-based financial inclusion policy, particularly to help micro, small and medium enterprises.

Thank you.