The Commonwealth and Francophonie, two associations representing more than 100 countries and 2.5 billion people, welcome the G20 focus on financial inclusion as it will assist association countries to strengthen financial inclusion. The two associations include most of the world’s poorest and most vulnerable countries, many of whom have the greatest degree of financial exclusion. However, the association countries also provide excellent examples of best practice from which many other developing countries and regions may be able to learn, so the two associations and the G20 are natural partners in promoting financial inclusion.
The G20 development working group (DWG) has taken important steps to address financial inclusion in a systematic manner. Its progress is having a valuable impact in promoting financial inclusion in the poorest, smallest and most vulnerable countries. The systematic approach being taken by the G20 can be usefully augmented. Evidence and best practice from across the Commonwealth and Francophonie suggests that there are four sets of practical steps which can be taken by the DWG to deepen and make even more effective its work on financial inclusion. These include specific actions within the G20’s existing agenda on financial inclusion, new institutional innovations by the G20, further proposals to promote financial inclusion based on evidence across the two associations, and elements of the G20’s action plan to embrace the specific challenges of the world’s poorest, smallest and most vulnerable countries.
How the G20 might help Commonwealth and Francophonie developing countries
- Make the G20’s work on SME finance more appropriate for their members.
- Develop a set of measures of data on financial inclusion suitable for association countries.
- Roll out principles for effective financial inclusion.
- The G20 could ask IFIs to re-consider its DWG lending policies towards small and vulnerable states so that those countries become better financially included.
New proposals to promote financial inclusion
- There could be more region-specific programmes for the Pacific, Caribbean, or African regions. Such programmes could improve, for example, access to private equity for SMEs.
- There could be further initiatives and capacity building on insurance and m-financial services.
- There could be more south–south learning programmes including among Commonwealth and Francophonie states.
Collectively, these point to three specific suggestions for the G20 DWG’s Action Plan on Financial Inclusion for 2011/12.
New action plan for G20 on ideas for financial inclusion of poorest, smallest and most vulnerable countries for 2011/12
- Roll out appropriate principles for financial inclusion and develop data and measures.
- Review IFI lending policies towards countries, and reconsider or re-apply the financial action task force (FATF) principles in small states.
- Design new initiatives such as south–south learning among the Commonwealth nations.
The G20 is very important for the Commonwealth and Francophonie, but the Commonwealth and Francophonie can also be important partners for the G20. More specifically, the two associations can help the G20 in a number of respects: (1) analysis and research; (2) consensus building; (3) knowledge sharing; and (4) global advocacy.