Helen Clark: Speech at Press briefing to announce the launch of a Financial Inclusion Support Facility offering grants for the development of new financial inclusion products
Sunday, 31 August, 2014 from 4:30-5:30pm
Tanoa Hotel, Apia: Press Briefing
Good afternoon and on behalf of UNDP and UNCDF thank you for being here with us today for this press briefing. A special thank you to our development partners (Australia, European Union and New Zealand) and our partner institution, the Central Bank of Samoa for joining us today, and for their very generous support to the UNDP/UNCDF Pacific Financial Inclusion Programme.
Today 2.5 billion adults - more than half of the world’s working adults - are excluded from formal financial services. This is most acute among low-income populations in emerging and developing economies, where approximately 80% of poor people do not have access to formal financial services.
In the Pacific the figures are similar, and in some Pacific countries, it is estimated that less than 10% of the adult population have access to basic financial services. Challenging geography, poor infrastructure and the high costs associated with delivering services to sparse populations have all contributed to a lack of financial inclusion in a region that spans a third of the earth’s surface.
It is now a well-established fact that giving low income households (and particularly women) access to formal financial services can make a critical contribution to reducing poverty and addressing inequality. Evidence from many parts of the world indicates that when more people have access to services such as secure savings, lower-cost remittances, affordable insurance and appropriate forms of credit, it can contribute to more inclusive growth and help foster domestic resource mobilization, increase productive capacity, and reduce vulnerability.
UNDP/UNCDF work together on the issue of financial inclusion in many parts of the world. Based on our experience we know that increased levels of financial inclusion – through the extension of savings, credit, insurance, and payment services – can contribute significantly to more sustainable and equitable economic growth.
We also know that financial inclusion is achieved when all individuals and businesses have access to, and can effectively use, a broad range of financial services that are provided responsibly, and at reasonable cost, by sustainable institutions in a well-regulated environment.
It is important to note that the private sector can play a key role in developing and delivering inclusive and sustainable financial services globally, as well as in the Pacific.
Private sector organizations (such as banks and mobile phone companies) are often able to pass on increasing efficiencies to their customers, as a result of advances in technology and other factors. Thus achieving economies of scale in the high-volume business of small-sized financial transactions is important from a business perspective, as well as from a human development perspective.
The Pacific Financial Inclusion Programme is embarking on its second phase, which will be implemented from now until 2019. A key component of this second phase will be the roll out of a new Financial Inclusion Support Facility.
I am delighted to be able to officially announce today that this Support Facility has an initial amount of US$5 million dollars which is available to support eligible private and public sector organizations that can contribute to PFIP’s mission of reaching one million low-income Pacific households by developing and offering new and affordable financial services products to Pacific Islanders.
PFIP’s support is intended to be catalytic, encouraging partners to invest in extending appropriate, affordable financial services to the financially excluded. PFIP also requires a cost-sharing component from private and public sector partners.
We are extremely excited about the second Phase of PFIP, and want to thank the very generous support of our donor partners, which has allowed us to develop and finance this new Financial Inclusion Support Facility.
Thank you for joining us today, and we look forward to working with our partners to expand access to financial services for all Pacific Islanders.