Increasing Sustainable Financial Access Access to financial services—secure savings, credit, insurance, and even such seemingly simple things as checking accounts—is critical to equitable growth and poverty reduction. CGD is shaping the international agenda on ways to increase access to financial services for poor people and small and medium businesses in the developing world, while avoiding credit bubbles that can have a powerful negative effect on growth and poverty reduction. A 2009 CGD task force report led by Liliana Rojas-Suarez, with co-chairs Stijn Claessens and Patrick Honohan, developed principles for regulators to ensure that financial access for the poor and middle class is not sacrificed on the altar of stability and showed why access and stability ultimately reinforce each other. The report, which recommended improvements in data collection, monitoring, and evaluation to achieve these ends, was presented at the World Bank/IMF annual meetings in Istanbul in 2009, where Princess Maxima of the Netherlands, UN special advocate for inclusive finance, praised it for “offering a clear set of guidelines for policymakers in the financial inclusion arena.”
Added the Princess: “I am sure that these policy principles, together with the UN key messages, will be widely used when setting up national strategies.” In 2010, the G-20 Summit in Toronto adopted nine “Principles for Innovative Financial Inclusion” that closely mirrored those of the CGD task force. Of course, the best known effort to increase poor people’s access to finance is microfinance. International awareness of the movement reached an apogee in 2006 when Muhammed Yunus and the Grameen Bank he founded were awarded the Nobel Peace Prize. By 2010, however, the pendulum had swung from applause to opprobrium amid stories in southern India of microfinance borrowers driven to suicide.
David Roodman talks with Marjolaine Nicod, Senior Policy Advisor on Aid Effectiveness at the OECD, and the Hon. Bob McMullan, Australia’s former Parliamentary Secretary for International Development Assistance, at a conference hosted by the Lowy Institute to stimulate international interest in the Asia-Pacific region and discuss how to accelerate progress toward the MDGs in the region.
A 2009 meeting of the access to finance task force with Jonathan Morduch, Professor of Public Policy and Economics, New York University; Elisabeth Rhyne, Managing Director, Center for Financial Inclusion, Accion International; and co-chairs Patrick Honohan, then Professor at Trinity College, now Ireland’s Central Bank Governor; Liliana Rojas-Suarez; and Stijn Claessens, Assistant Director in the Research Department of the IMF.
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