Speech by H.M. Queen Máxima, UNSGSA, Honorary Patron of the G20 Global Partnership for Financial Inclusion, Malaysia

Speech | 11-09-2013

Good morning Governors, ladies and gentlemen,

I would like to thank AFI for the opportunity to address this forum for a third time. Amazing you haven't gotten tired of me yet. Thank you very much for your words. It was very kind. I am pleased to be in Malaysia again, and extend my sincere thanks to Governor Zeti, Deputy Governor Mohammad Ibrahim and Bank Negara. Your leadership to advance financial inclusion has been an inspiration to us all.

Much has been said already and let me stress again that we can all be proud of the remarkable progress in financial inclusion. Today, many share the view that financial inclusion, financial stability and financial integrity are not only compatible, but mutually reinforcing. Five years ago it was very different. Today, more and more dedicated central bankers and finance policy makers like yourselves have financial inclusion in their mandate. And we are seeing the results. The latestFinancial Accessreport tells us that accounts per 1,000 adults rose rather steadily between 2004 and 2011. More than 40 countries have made international commitments to financial inclusion. And more than 20 countries have a financial education strategy. International support has expanded too, evidenced in the United Nations, the G20, the World Bank, the IMF, ASEAN, D8 and many other organizations.

Still one out of every three adults in the world is still excluded from the formal financial system. Not to forget the small and medium-sized enterprises.

The AFI community has been doing a very good job. And I'd like to highlight several next priorities that might be helpful.

A first priority is to implement standard setting bodies' proportional and risk-based regulations much more widely. Or, proportionality in practice like Dr. Zeti just eloquently stated. One session today will look at global financial standards. The advances are amazing. In June, I addressed the FATF Plenary for a second time, and met with leaders of its associated regional bodies. FATF has now made financial inclusion part of its long-term work agenda. And, it has recognized financial exclusion as a risk to integrity. We also see similar commitment from other standard setting bodies including the Basel Committee and the Insurance Supervisors. This means that global standards now give national policymakers more flexibility to adapt local regulations that open pathways to inclusion.

The issue is that these are not widely being implemented. We know very well the challenges regulators face in doing so, such as: dual markets that are at once under- and well-developed; the high rates of informality; or the issue of capacity constraints. Thus, continued efforts to raise awareness and share proven approaches are extremely important. This together with technical assistance and training for those countries that are in earlier stages of regulatory development as well as continued dialogue with standard setting bodies will be so important in AFI's future work.

In all this, it is important to remember that financial inclusion is not an end in itself. It enables larger goals such as equitable economic prosperity. It accelerates poverty reduction, job creation, food security, health, resilience, women's empowerment and many other positive outcomes. This is getting much wider recognition from private companies to ministries to heads of state. I am also especially pleased that the UN Secretary-General and his High Level Panel on post-2015 development have recognized the critical role of inclusive finance for development in their recent reports. So when you are addressing the issue of financial inclusion, do not forget this end. That is, to create the jobs, to increase household incomes, to build family resilience and to increase opportunities for women.

So, if we want to focus on this end, coordination across different sectors will be vital. In my country visits, I have learned that even when there are strong champions like yourselves, the champions cannot do it alone if we want to have a strong developmental effect. Therefore, setting up national targets has to go hand in hand with strong coordination mechanisms that will advance major development goals. These committees reach across government and include private companies with big distribution networks, NGOs, of course telecoms and financial service providers and other stakeholders. I believe strongly in this approach.

Tomorrow, AFI and Bank Negara will announce the Sansana Accord. This is a very welcome articulation of the priority that countries are placing on achieving financial inclusion and on setting targets. One of the successes of the Millennium Development Goals has been widespread recognition of the value of straightforward, ambitious and measurable goals, with time-bound targets. It is extraordinary that in financial inclusion we are achieving this in the most desirable way possible-from the ground up. Given that, any world-wide target must be sustained by national goals. And of course these should be monitored.

Having said that, I urge you to aim high as you set your national goals and targets. For me, it is clear that our overall aspiration should be nothing less than universal access. Every person, every business in every country deserves this opportunity. Of course, every country has a different starting point. Targets, actions and time frames will thus vary. I am really inspired by the level of ambition that countries have already set, including those starting from low levels. Rwanda 80% access by 2017. Ghana and Nigeria 70%. Tanzania 50%. And Malaysia, 95% by next year. I am also enthused that countries are setting targets on savings accounts, insurance and pensions, which actually improve welfare and resilience. Or on SME credit to reflect job creation. On loans to women to reflect empowerment. And let us not forget access in rural areas, where 70% of poor people live and work.

The members and partners of AFI have a growing voice. I encourage you to use this voice to help shape the financial system that will help development in your own countries. As you know, in two years, the Millennium Development Goals will reach the target date. The UN is leading a global process to determine the development agenda that will follow. I have been very active in discussions on this because this future agenda will shape political priorities, investments, funding and policies for years to come. Let us be sure that inclusive finance is on this post-2015 development agenda. And let's make it a bold and inspiring vision-a global aspiration for universal access to financial services both for households and enterprises by 2030.

I deeply believe that with the knowledge and commitment that we possess today, universal access to financial services is achievable. Let us seize the opportunity to make this a reality.

I wish you a very productive forum and continued good work in the coming years as AFI transitions to an independent institution.

Thank you.