This was the issue the president of the World Bank Group, UN Secretary-General, UN Secretary-General’s Special Advocate for Inclusive Finance for Development, private and public sector leaders discussed at an event, Universal Financial Access 2020, during the 2015 World Bank Group-IMF Spring Meetings.
Transaction accounts can open up access to those currently left out of the banking system, providing a basic entry point, or pathway, to broader financial inclusion.
It’s spring in Washington during a pivotal year in development. Thousands of government officials, journalists, civil society representatives, academics, and CEOs are arriving for the Spring Meetings of the World Bank Group and International Monetary Fund the week of April 13.
It’s one of the last such gatherings before decisions are made on the world’s development priorities and goals over the next 15 years – and how to finance them. In fact, the only item on the April 18 agenda of the Development Committee concerns these post-2015 goals and financing for development.
Two and a half billion people in the world do not have access to formal financial services. This includes 80% of the poor — those who live on less than $2 a day. Small businesses are similarly disadvantaged: As many as 200 million say they lack the financing they need to thrive.
This is why we at the World Bank want men and women around the world to have access to a bank account or a device, such as a cell phone, that will let them store money and send and receive payments. This is a basic building block for people to manage their financial lives.
Why is this so important? Financial inclusion helps lift people out of poverty and can help speed economic development. It can draw more women into the mainstream of economic activity, harnessing their contributions to society. And it will help governments provide more efficient delivery of services to their people by streamlining transfers and cutting administrative costs.
A step out of poverty
Studies show that access to the financial system can reduce income inequality, boost job creation, and make people less vulnerable to unexpected losses of income. People who are "unbanked" find it harder to save, plan for the future, start a business, or recover from a crisis.
Being able to save, make non-cash payments, send or receive remittances, get credit, or get insurance can be instrumental in raising living standards and helping businesses prosper. It helps people to invest more in education or health care.
What if you had no secure, affordable way to save money, pay bills, or obtain a business loan?
- financial inclusion
President Jim Yong Kim outlined his plan for a leaner, more efficient and tightly knit World Bank Group in his opening address at the Annual Meetings — and listed several ways changes would be visible to countries working with the institution. Among them: reducing by a third the amount of time a project takes to get off the ground; gathering feedback from all beneficiaries on development projects; and openly sharing knowledge and experience, including making it easy to see exactly where the Bank is working and what it is doing. “Together, we must urgently lift a billion people from extreme poverty, help them to regain dignity, help them find hope, and help them change their own lives — and the whole world’s future — for the better,” said Kim. The Development Committee discusses the Bank Group’s new strategy on Saturday.
An excited crowd greeted Malala Yousafzai, the 16-year-old whose fight for girls’ education earned her the European Union’s Sakharov prize for freedom of thought and a Nobel Peace Prize nomination this year. In an often humorous, sometimes touching conversation with President Kim and young people in the audience on International Day of the Girl, Malala talked about her life before and after an assassination attempt by the Taliban. Her cause, education, is the best way to fight poverty and should be the top priority of development institutions, she said. “I believe that when we work together, that it’s really easy for us to achieve our goals,” she said. Kim pledged $200,000 to the Malala Fund on behalf of the World Bank. Replay the webcast and read our Youthink blog.