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Make the Financial Markets Work for Asia's Poor - ADB Seminar
MANILA, PHILIPPINES - Getting banking services to all of the region’s poor by 2020 is possible – albeit daunting – if leadership from the public and private sectors work together to boost financial literacy and increase investment in infrastructure and technology, delegates at the 45th Annual Meeting of the Asian Development Bank’s (ADB) heard today.
"Achievement of full financial inclusion is not a mere numbers game that can be measured through the bank accounts opened, transactions conducted, beneficiaries reached out to," said Lakshmi Venkatachalam, ADB’s Vice President of Private Sector and Cofinancing Operations, speaking at a seminar entitled Global Financial Inclusion by 2020: Getting There from Here.
“For financial inclusion to be truly effective there should be an ecosystem that has components of social and physical infrastructure, such as access to health services, education, water, roads and availability of employment opportunities that enable a user to take full advantage of financial inclusion.”
Half the world’s adults currently lacks access to savings accounts or other formal financial services, such as insurance, loans, remittances or financing for small- and medium-sized enterprises, which can hinder their ability to build savings for investment in opportunities or assets. It also leaves them more vulnerable to risks, and less able to manage cash flow.
"Financial inclusion is a major challenge that has no simple solution and requires a lot of imagination to solve,” said Nestor A. Espenilla, Jr., Deputy Governor of Bangko Sentral Ng Pilipinas, the Philippine central bank. "Marshalling technology, such as mobile phones and mobile money, is likely to be a big part of the solution, but we also need the enabling infrastructure, the regulatory framework, and greater financial literacy on the part of the underserved, to make finance much more inclusive."
Financial inclusion comes in stages, starting with savings and borrowing, followed by more complex aspects such as investing or insurance. The region’s poor need more than loans – there needs to be a shift from credit to savings, which requires significant growth and development of existing financial systems.
ADB will help catalyze financial sector development that serves the poor by addressing financial system market gaps where the private sector is not present and mobilizing external capital to participate in financial sector growth opportunities in developing Asia.