GFDR 2014: Financial Inclusion
COMING ON NOVEMBER 12, 2013. PLEASE STAY TUNED!
The 2014 Global Financial Development Report (GFDR), to be launched in late 2013, will focus on Financial Inclusion. This page summarizes the case for financial inclusion as a theme and presents the concept note for the report. Please stay tuned for more.
- It is an important topic for the World Bank Group (WBG) and the development community. Financial inclusion can be a key driver of economic growth and poverty alleviation, as access to finance can boost job creation, reduce vulnerability to shocks and increase investments in human capital. Despite some progress, there is still a major scope for improvement in financial inclusion. For example, some 2.7 billion working age adults do not have a formal sector savings, transaction, or credit account.
- It is a core topic for the World Bank’s Financial and Private Sector Development (FPD) network. Financial inclusion is an important part of FPD’s strategic goals. In its new strategy, FPD has committed to promoting access, reach and quality of services for underserved populations. This calls for strengthening financial infrastructure, responsibly expanding financial services to low income households and micro, small, and medium enterprises (MSMEs), deepening investor base for MSMEs and start-ups, expanding private sector products to low-income segments, and targeting women entrepreneurship and labor force participation—all areas of FPD expertise.
- Financial inclusion has moved up on the G20 agenda. The G20 leaders, at their February 2012 meeting in Mexico, agreed to follow through on the recommendations of the 2011 Global Partnership for Financial Inclusion report, and take the financial inclusion agenda forward to concrete results. They also agreed to work on several areas to foster financial inclusion, including (i) an implementation framework for country commitments for financial inclusion; (ii) recognizing the importance and relevance of the work of the WBG and others on financial education; and (iii) advancing the financial consumer protection agenda. This is likely to keep financial inclusion high on the G20 agenda. The planned September 2013 launch will be a well timed from the viewpoint of contributing to the G20 debate, as it will be close to the planned Russia G20 Summit, and ahead of Australia taking over as the G20 chair.
- Scope exists for a comprehensive analytical study on the subject. A critical mass of new data, new research, and new operational work has accumulated on the subject recently. A 2007 World Bank policy research report (Finance for All?) provided a comprehensive overview of the evidence and country experience, followed by the 2009 and 2010 CGAP/World Bank Financial Access reports. The 2014 GFDR would be a good opportunity to revisit the topic, and to incorporate the 2011 Global Findex data and research.
- Selecting financial inclusion makes sense from the perspective of the GFDR series. The inaugural report, 2013 GFDR, reflecting its overall theme, has mostly focused on issues such as on financial system regulation and supervision and state’s interventions in financial institutions. The 2014 GFDR can give relatively more prominence to financial inclusion work, and the subsequent GFDR can have a more central focus on capital market development issues.
- It is a topic of interest for donors and other stakeholders. Informal early contacts with donors suggest strong interest in supporting a financial inclusion GFDR. Also, there is considerable private sector interest in this topic. For example, many emerging market financial institutions are keen to develop mobile banking and other inclusion-related initiatives. A GFDR on inclusion thus offers an opportunity to reach out beyond the usual policy audience.