China, Egypt, and Mexico have been picked as ‘model countries’ in World Bank Group, the International Telecommunication Union (ITU) and the Committee on Payments and Market Infrastructures’ (CPMI) new Financial Inclusion Global Initiative.
With support from the Bill & Melinda Gates Foundation, an organisation that has been passionate about this issue, access to financial services will be simplified and made more available to the unbanked and underbanked in these three regions.
Despite WBG President Kim vowing to provide Universal Financial Access (UFA) by 2020, two billion people still remain unbanked around the world so initiatives like these are necessary. The three-year program has two separate work streams, operational and knowledge, the former supporting each country’s national authority to improve access for a large number of people and the latter, to advance research and develop policy recommendations in digital finance.
The results from this program will be showcased at the Financial Inclusion Global Initiative Symposium 2017 to be held in Bangalore, India at the end of this year. World Bank Group’s Ceyla Pazarbasioglu, Senior Director for the Finance and Markets Global Practice, said that working with the ITU and CPMI ‘will enable our partner countries to better harness the potential of digital technologies for financial inclusion and to manage associated risks,’ Pazarbasioglu said.
World Bank Group will also be providing technical assistance as per the CPMI-WBG report on Payment Aspects of Financial Inclusion (PAFI) and this help strengthen public and private-sector commitment and improve ‘legal and regulatory frameworks, financial markets and ICT infrastructure for financial access and inclusion. It will also focus on improving financial product design; financial literacy and awareness; diversified access points; and large-volume, recurring payment streams.’
‘An estimated two billion adults are still without access to a bank account, and yet some 1.6 billion of them have access to a mobile phone, creating the potential for e-finance access,’ said ITU Secretary-General Houlin Zhao. ‘The ITU community is excited to leverage our unique technical expertise to make e-finance a reality for millions of people through the Financial Inclusion Global Initiative, and in so doing, contribute to poverty eradication and the achievement of the global Sustainable Development Goals.’
Jason Lamb, Deputy Director at the Bill & Melinda Gates Foundation, highlighted that the organisation believe that the Financial Inclusion Global Initiative will ‘bring digital financial services to some of the world’s most vulnerable unbanked populations as well as advance knowledge on creating a robust digital payments ecosystem.’
China, Egypt and Mexico were chosen for their potential for country programme, the level of national government and private-sector commitment to financial inclusion, the number of people that could be reached through digital financial services and potential for reforms to encourage innovation. ‘Egypt has the potential to bring a large number of people into the formal financial sector (more than 44 million adults). These analyses found that Egypt has adequate laws, regulations and financial and ICT infrastructure, but a lack of funding to cover related reforms,’ according to the World Bank Group.