Experts agree: universal access to financial services and supporting women will reduce poverty

Innovation and new technologies are key to accelerate financial inclusion

28 July 2017
Fundación Microfinanzas BBVA

“Financial inclusion is key to reducing poverty and fostering inclusive economic growth. This is why, universal financial inclusion remains a top priority for United Nations.” With these words UN Deputy Secretary-General Amina J. Mohammed summarized  some of the key points of the High Level Panel, held in Madrid during the Forum on Financial Inclusion and Development, organized by the BBVA Microfinance Foundation (BBVAMF) in its 10th anniversary celebration.

Even though she was unable to attend the event, she highlighted in a video message the fact that despite significant progress in recent decades still around 2 billion adults are excluded from formal financial services, more than half of them women. The 2030 Agenda for Sustainable Development includes access to financial services across its 17 Sustainable Development Goals.  

Amina J. Mohammed’s video message gave way to the panel with the reprentatives of the Foundation’s strategic partners. Claudio Gonzalez-Vega, BBVAMF’s Chairman of the Board of Trustees and moderator pointed out that the celebration of the achievements must come with the acknowledgement of urgent pending tasks and best tools for achieving them.

Talent is equally distributed around the world… opportunity is not

“Talent is equally distributed around the world… opportunity is not. Talent is not materializing into progress because people with great ideas are not given the opportunity of financial inclusion.” This is what Ibero-American Secretary General Rebeca Grynspan said to emphasize the importance of financial inclusion to achieve sustainable growth and equal opportunities.  

Fernando García Casas, Spanish Secretary of State for International Cooperation and for Ibero-America, alluded to BBVAMF entrepreneurs’ children who have completed university and pointed out the need for public and private actors to co-operate; he also stressed the need of being more creative, innovative and allocating further resources for cooperation.

Representatives from international organizations participated in the Financial Inclusion and Development Forum

Technology to accelerate financial inclusion

World Bank representative Matthew Saal, Head of Digital Finance at IFC, explained that digital transformation of financial services goes beyond mobile banking and electronic money, because aside from channels, it affects products (more data allows the design of customized products) and processes, improving efficiency.

On behalf of the Inter-American Development Bank, IIC Chief Investment Officer Gema Sacristán noted that innovation is responsible for major advances in the region. “Innovation in biometric identity verification, digital wallets, or big data, will allow greater inclusion for communities so far excluded from financial services.” According to her, rolling out the necessary supporting infrastructure and regulations which foster innovation and protect consumers is critical.

Bridging the gender gap, another major pending task

The greater exclusion women suffer from labor and financial markets increases their probability to live in poverty along with their children, especially in developing countries. This situation is aggravated when it comes to single parent households. UN Women Program Division Director Maria Noel Vaeza-Ogilvie focused her intervention on these matters. In her words, “if women lack financial inclusion and economic empowerment, the world will continue to stagnate.” She also pointed out that reaching SDGs involves achieving women empowerment. At the current rate, it would take 170 years for the economic gender gap to close. Therefore, “we need to be disruptive”, UN Women expert said.  

If women lack financial inclusion and economic empowerment, the world will continue to stagnate

In line with her words, Rebeca Grynspan stated: “We must also break certain cultural rules to achieve financial inclusion. This is essential for women’s inclusion.” She added that “75% of the so-called neet (not in education, employment or training) in Latin America are women, most of them have quit their studies to undertake unpaid care work”. According to her, “bridging the gender gap could add 34% to GDP”.

BBVA Microfinance Foundation, committed with innovation and women’s empowerment

Serving the vulnerable population means primarily serving women. They represent 60% of the entrepreneurs BBVAMF supports and 45% of them are heads of households. They start with smaller assets (32% lower than men) but report greater efficiencies and growth rates than men’s businesses.

In recent years, the wave of technological change in financial services has improved financial inclusion, quality and sustainability. BBVAMF is part of this process to bring the age of opportunity to everyone.