Poverty and Financial Exclusion affects us all

Poverty and Financial Exclusion affects us all. In Australia recent studies suggest at least 3.1 million or 17% of our community are considered to be financially excluded. Good Shepherd Microfinance, National Australia Bank, State and Federal Governments and many Not For Profit organisations have been working together for over 10 years to overcome this financial exclusion and provide zero interest loans or low interest loans, matched savings and financial advice to assist this growing group within our communities. Recently I went to London to participate in a conference organised by the US Centre for Financial Inclusion. There were 300 participants invited from around the world and the conference was supported by Citi Foundation, Visa, MasterCard and a range of other financial organisations. I was invited in my capacity as the chair of Good Shepherd Microfinance. The conference focused on the work that the Centre for Financial Inclusion at Accion has been undertaking on developing pathways by 2020 on how over 2.5 billion adults , many who lack even a bank account might become financially included. I should have explained what is meant by the term financial inclusion, “a state in which all people who can use them have access to a suite of quality financial services, provided at affordable prices, in a convenient manner and with dignity to the clients. Financial services are delivered by a range of providers, most of them private, to a financially capable clientele. The participants were optimistic that we are well positioned for significant leaps in improving financial inclusion. The rise in income of many around the world, deep penetration of telecommunications infrastructure and upgrading of payment systems, micro-financing institutions being created and policy makers prioritising financial inclusion around the world. The conference held over three days covering a wide range of topics and many discussions impressed me, more can be found on the Website www.financialinclusion2020.org Some of these ideas were set out in - Seizing the Moment : On the road to Financial Inclusion. (Centre for Financial Inclusion at Accion. 2013) 1. The use of mobile phones as payment devices, in Kenya with the introduction of “M-PESA which in a very short time has over 17 million users, allowing people in the most remote parts of the country to interact with each other . Mobile money has attracted new entrants especially across Africa where it is suggested that 15% of adults said they use a phone through SMS to send or receive money. In 2012 McKinsey identified over 100 Mobile money companies in emerging markets .” 2. 3. The increase in the availability of small loans through the growth of micro-finance organisations throughout the world. The difference these loans make was highlighted in a variety of research papers presented. Particularly when loans are given to women who then are able to build small businesses and make an enormous difference to their lives and their communities life. 4. The changes in places like Kenya to both its productivity and capacity to lift significant numbers of the population out of poverty by the use of mobile money and micro-financing. 5. The role central bankers can play in directing policy in a manner that encourages government and businesses to invest. The former Governor of the Reserve Bank of India , Duvvuri Subbarao is a great example of a leader who understood both the markets and the government's capacity to influence the way in which millions of people might be helped out of poverty. I'm very much of the view and, as suggested by the conference, the whole idea of financial exclusion is an idea whose time has come. The difference it makes for people to feel part of our community, to be lifted out of poverty with dignity and respect and for the improvement of the bottom line productivity in our country is enormous. We need many voices talking about fair financial services, that don't exploit the poor and those in financial crisis. We need all of our banks not just the National Australia Bank to actually make funds available to those who are poor at zero or low interest to be able to deal with their day-to-day needs and to smooth over their financial crises. Good Shepherd Microfinance and NAB have committed to reaching 1 million low income Australians with fair and affordable finance by 2018 Please follow up some of these issues, make a comment or add your own experiences

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