Access to Finance
"We all have seen evidence of the appeal of microfinance to a variety of stakeholders, not least the ultimate clients: poor people without the benefit of banking facilities, who struggle for their daily subsistence."
Your Royal Highness, Mr. President,
This is a very important moment in time.
Over the years, we all have seen evidence of the appeal of microfinance to a variety of stakeholders, not least the ultimate clients: poor people without the benefit of banking facilities, who struggle for their daily subsistence. We know, the number of people with access to simple, household level financial services has been steadily increasing, the services offered are in a continuous process of diversification, and all this is drawing the attention of investors, banks, governments and regulators. So, broadening access clearly serves a purpose.
This has been reflected in a wealth of success stories, case studies and also wider field research. All this has contributed to a more professional microfinance sector and quite a number of do’s and don’ts. We need such a professional microfinance more urgently than ever. The financial economic crisis makes microfinance often the only source of finance available.
But, so far knowledge about access to finance and its relevance for the poor has not been acquired in a sufficiently systematic, dedicated and comprehensive way. Which means that we sometimes operate through trial and error whereas more robust action would be possible if we had more insight in processes and effects.
This matters, first of all because access to finance for all is far from accomplished: outreach and scaling up of services are crucial. Secondly, availability and use of sound data informs and improves policy. Thirdly, monitoring becomes possible and this contributes to better results.
Last but not least, data are the basis for empirical research into the difference financial services make in the lives of the poor. As poverty is a condition pervading most aspects of life, trying to isolate the impact of access to finance on poverty reduction may be a less than realistic effort; solid evidence of the potential contribution of access to finance to moving out of poverty would be extremely important in itself.
The current lack of data and its adverse effect on strengthening a pro-poor financial sector was highlighted by the former UN Advisors Group, where Princess Maxima played a leading role, for which I thank her, leading to a focused exercise to make progress in this area, part of which is the Project the IMF is launching today.
As you may gather from what I just said, I fully support this initiative, and I am happy that we have been able to contribute financially to this work, as part of our support to different Topical Trust Funds at the IMF. I welcome IMF’s work to move towards more Inclusive Financial Statistics, so to say, in order to get better insights into the outreach of financial services. What adds value to this exercise is that it is part of a coordinated effort, in which also other parties participate, including the World Bank and the Gates Foundation. I thank Dominique Strauss Kahn for his efforts, support and enthusiasm for this work. The IMF is more and more taking a direction that directly helps the poor fighting poverty themselves.
The launch of this project today also offers a flying start to Princess Màxima in her new capacity as Special Advocate to the Secretary-General: geen woorden maar daden, as we say in Holland; actions speak louder than words.
Thank you very much.