Setting a goal to provide universal financial access is the best approach in supporting poor families in gaining a foothold on the first rung of the ladder toward prosperity, World Bank Group President Jim Yong Kim told a forum on financial inclusion during the Bank-Fund Annual Meeting Program of Seminars on October 11, 2013.
“We like to set targets now, here at the World Bank Group,” Kim said. “For me, it’s based on the firm belief that unless you have a real target with a real end-date, you’re not forced to change the way you do your work.”
Kim described the goals—which also include financial access to 200 million businesses—as “extremely ambitious.”
The aspiration to achieve universal financial access should force “our whole team” at the World Bank Group to “take responsibility and think about what we need to do differently to get there” by 2020, said Kim.
President Kim and Queen Máxima of the Netherlands, the U.N. Secretary General’s Special Advocate for Inclusive Finance for Development, discussed financial inclusion as “a powerful accelerator of economic progress.” Queen Máxima agreed with Kim that it would take transformational changes to achieve universal access to financial services. They noted that the Bank, IFC and the Consultative Group to Assist the Poor (CGAP) offer financing, data, and know-how to promote inclusion.
Financial inclusion is an enabler and a catalyst for achieving the Bank Group’s goals of ending extreme poverty by 2030 and boosting shared prosperity for the bottom 40 percent of the population in all developing countries. Financial inclusion was recently recognized as a vital development priority by the U.N. High-Level Panel on the Post-2015 development agenda.
Following Kim and Queen Máxima, a panel of international policymakers, financial-services executives, and civil-society leaders analyzed various approaches to make financial services more affordable and accessible to the poor. Those approaches include: reaching nation-by-nation financial inclusion targets and commitments; rapidly expanding access through transactions instruments such as cards and mobile wallets; improving the availability of data; and creating transformative business models to help financial firms deliver lower-cost, lower-risk and more readily accessible services.
More than 50 countries have now made commitments or set targets for financial inclusion, forum participants noted. With more countries adopting such strategies and action plans, panelists said, nations are now clearly embracing policy and legal reforms that can reduce the costs and risks of reaching the unbanked and the underserved.
Kim underscored the importance and difficulty of stretching today’s thinking beyond the comfortable status quo. Setting “difficult targets” and highlighting the need for total financial inclusion, said Kim, are “an indication of how much faith I have in our staff” and in the World Bank Group’s ability to embrace universal financial inclusion as a key part of the development agenda.
“I just want to put out the challenge here today—telecom companies, regulators, whoever’s in this room: This is do-able,” said Kim. “I’m telling you that, no matter where you are, in the public sector or the private sector, it is in all of your interests to get everyone in the world access to financial services. This is only good for the world. It’s going to increase the number of brilliant minds that are participating in the market. It’s going to help us end poverty.”
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