November 30, 2016
On November 30 and December 1, 2015, the U.S. Department of the Treasury and the U.S. Agency for International Development (USAID) brought together leaders in U.S. Government (USG), other governments, and the private and non-profit sectors to discuss the urgent topic of how to foster and expand financial inclusion domestically and internationally. Our goal was to encourage a robust exchange of ideas and approaches to significantly expanding financial inclusion so that people around the world have the opportunity and the tools they need to for their own financial growth and security. After two days of experiential activities, panel sessions, and focused breakout conversations, we learned a lot about where we are and where we need to be. Below is a brief summary of the discussions and our takeaways from the Forum.
For your reference, a video recording of the second day of the event can be found at http://www.yorkcast.com/treasury/events/2015/12/01/financial/. Additionally, you can find participant insights from the event on Twitter using the hashtag #FIF2015.
We must continue to better understand the challenges facing those who are excluded from thefinancial system and respond with action-oriented USG leadership.
Financial exclusion is not only costly to individuals, but also to our domestic and global economy. As Secretary Lew clearly stated in his opening remarks, “we must find new approaches to include young people and financially isolated individuals and communities, and consider how to support the credit needs of small and medium enterprises.” With that charge, Forum participants deepened their understanding of evidence showing that financial inclusion has a direct bearing on national economic growth and is interrelated to financial stability, integrity, and protection. As we heard from Tilman Ehrbeck, (Partner at Omidyar Network), currently, two billion people globally live completely outside the formal financial sector, and the financial services available in the informal economy may be five to 10 times more expensive. This exclusion means people too often lack the basic financial management tools required to save for aspirational goals, manage risks, and recover from financial shocks – whether a natural disaster or economic crisis – that can plunge them into or even further into poverty. Thirty-four USG participants became more familiar with these challenges by spending a morning conducting transactions at alternative financial services providers in neighborhoods around Washington, D.C. They noted a lack of transparency, high fees, and inconvenience as major obstacles to conducting financial transactions in underserved communities right here in the United States. Throughout the Forum, some participants noted the same type of challenges also exist among the underserved in developing countries.