Global Policy Architecture
Recognizing the many ways that financial inclusion can benefit their countries and citizens, policy makers are adapting to the fast-changing picture that comes along with the innovations needed for real progress.
A strong political tailwind supports financial inclusion, with a growing number of governments making financial inclusion a policy priority alongside the traditional goals of financial stability and integrity and the protection of financial consumers. Country-level developments coincide with increasing mainstreaming of financial inclusion in the work of global financial standard-setting bodies (SSBs), in collaboration with the G20’s Global Partnership for Financial Inclusion (GPFI) (including CGAP and the other GPFI Implementing Partners), the UN Secretary General’s Special Advocate of Financial Inclusion for Development (UNSGSA), and many others. Important new actors such as the International Monetary Fund are joining CGAP and others in exploring how financial inclusion is linked with financial sector stability and integrity, as well as the protection of customers, and how all four policy objectives can be mutually reinforcing.
These are the developments that CGAP’s Global Policy Architecture Initiative aims to stimulate and facilitate. But the picture is dynamic, and the innovation necessary for massive progress on financial inclusion—especially the digital finance revolution reaching scale in increasing numbers of countries—changes the nature, and often the level, of the risks with which policy makers must contend.
Jan Dhan Yojana: India’s Push for Financial Inclusion
In August 2014, India’s Prime Minister Narendra Modi announced a plan for comprehensive financial inclusion, which began with setting targets for opening new bank accounts. More than 18 million new bank accounts were opened during the first week of the plan, which uses the Aadhaar Unique Identification system and one straightforward form to connect previously unbanked people with the formal financial system. By the end of January, the program had opened 115 million accounts. But account opening is not an end in itself.
FY2015 Highlights/Outputs
Leveraged CGAP’s longstanding policy engagement to build the trust, and reliance by the SSBs to contribute to their growing support for financial inclusion, as evidenced by their many new relevant work streams and activities.
With the Office of the UNSGSA, led technical input for the October 2014 high-level meeting on financial inclusion among SSB Chairs and Secretaries General convened by the UNSGSA and the Chair of Basel Committee on Banking Supervision.
With the Philippine central bank, led the finalization of the report “Range of practice in the regulation and supervision of institutions relevant to financial inclusion,” published by the Basel Committee on Banking Supervision in January 2015.
Contributed to an updated G20 Financial Inclusion Action Plan, approved in September 2014, which coincides closely with objectives of CGAP’s work with the SSBs and other global bodies.
Introduced the digital financial inclusion revolution to the world of global financial sector standard setting, leading the preparation of content for the 2nd GPFI Conference on SSBs and Financial Inclusion on the theme of the evolving digital financial inclusion landscape, hosted by the Financial Stability Institute at the Bank for International Settlements in Basel.