Financial Inclusion and the World Economic Forum at Davos

> Posted by Jeffrey Riecke, Communications Associate, CFI

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Last week global leaders across industries gathered in the tiny mountain town of Davos, Switzerland for the 2015 World Economic Forum (WEF). (Though you probably already knew that, given the annual event’s ever-swelling stature and press.) The WEF fosters strategic dialogues in the hopes of developing ideas, insights, and partnerships around the most pressing issues and transformations reshaping our world. This year’s WEF included sessions from Jack Ma of Alibaba on the future of commerce, German Chancellor Angela Merkel on global responsibilities in a digital age, IMF Director Christine Lagarde on global monetary policy, former Israeli President Shimon Peres on political affairs affecting the region, and Bill Gates on sustainable future development. Of course we were following the topic of financial inclusion, and the action that got underway made it a week worth noting. Here’s a snapshot of some of the financial inclusion happenings at Davos.

In the “Inclusive Growth in a Digital Age” session held on Wednesday, a panel, which included MasterCard CEO Ajay Banga, considered how our age of digitization can confront income and wealth inequality, support investments in education and work-based training, and address vulnerable employment. Among the points of discussion was mobile phone penetration leveraged for financial services access. A full video recording of the session is available, here.

A session including Queen Maxima of the Netherlands, World Bank President Kim, and India’s Power and Coal Minister Piyush Goyal recognized the ambitious agenda set for in India’s new national financial inclusion strategy, Jan Dhan Yojana. Queen Maxima, who serves as the United Nations Secretary General’s Special Advocate for Inclusive Finance, expressed an interest in studying the scheme, while Minister Goyal offered to send officials to the World Bank to support the strategy’s replication in other areas of the world. The support follows recent attention on India’s inclusion efforts, as it was announced on Tuesday that the government of India was entered into the Guinness Book of World Records for most bank accounts opened in one week: roughly 18 million between August 23 and 29, 2014, as part of Jan Dhan Yojana. Since the financial inclusion strategy launched last August, 11.5 crore (115 million) accounts have been opened, reportedly covering 99 percent of Indian households.

Gender equality was highlighted at the WEF in several sessions. In a side interview with the Huffington Post, United Nations Foundation CEO Kathy Calvin discussed one issue affecting a range of topics, from financial inclusion to the right to work: proper birth records. Some women in developing countries don’t receive proper documentation when they’re born, making it hard for them to open bank accounts and secure employment, and hard for researchers and census takers to track their progress. It’s important and encouraging that gender parity was a focus at the WEF, but in the future this should extend to WEF participation, too. According to Quartz, only 17 percent of attendees this year were women.

Another side meeting, hosted by the Alliance for Financial Inclusion (AFI) President Alfred Hannig and Visa, introduced the AFI Private-Public Dialogue model to a group of private sector CEOs. The recently launched Private-Public Dialogue platform provides opportunities for dialogue between policymakers, regulators, the private sector, development partners, and other key players in financial inclusion. The exchange is to inform and facilitate coordinated actions to support AFI members in designing and implementing smart policy. Private sector participants for the platform will be selected this year.

A number of new financial inclusion-related initiatives were launched at Davos. A microinsurance consortium and microinsurance venture incubator were announced by a group of global insurance companies and brokers. The companies in the consortium include American International Group, Aspen Insurance Holdings Limited, Hamilton Insurance Group, and Zurich Insurance Group. The incubator aims to launch 10 microinsurance ventures over the next 10 years for underserved clients in developing countries.

On Thursday, MasterCard and the African Development Bank (AfDB) announced a broad collaboration to develop solutions for expanding access and usage of digital financial services across the continent. The two organizations will work with African governments and local private companies to design and deliver affordable services for unbanked populations. The collaboration seeks to invest in a selected set of innovative financial services companies and solutions targeting inclusion barriers, build cohesive African financial systems at the country level, and share knowledge across stakeholder groups to support financial inclusion thought leadership.

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