Press Coverage
UK plans 'financial inclusion' fund for developing world
UK plans 'financial inclusion' fund for developing world The UK plans to set up a 'financial inclusion' fund to help advise poor people in the developing world on how to use loans, savings and payment services and how to avoid unscrupulous providers. Access to microfinance has increased steadily in parts of Asia, Africa and Latin America in recent years, but the UK is concerned that understanding of the services on offer is often low among potential users. The UK will pledge at least £3m ($5.8m, €4.5m) to the fund, which will aim to provide basic financial education and numerical skills, demonstrate the benefit of a savings account and offer training in new technology such as mobile phone-based banking. It plans to use a government-hosted conference in London in June to attract contributions from other donors. Microfinance encompasses microcredit - the provision of small loans - as well as savings, insurance and payment services for the poor. Some 500m people use microfinance around the world, but the number of potential users is 3bn, according to estimates by CGAP, a think-tank based at the World Bank. The UK government has made financial inclusion a domestic priority too and has achieved some success in increasing the number of UK residents who hold basic bank accounts. It sees opportunities to apply the lessons it has learnt overseas, albeit in very different circumstances. Ed Balls, City minister, said: 'By bringing together governments, charities and the private sector, our forthcoming conference will help us learn from such innovations around the world, whether it's microfinance projects in Bangladesh or mobile phone banking in Kenya, and create workable solutions to financial exclusion.' The conference will be hosted jointly by the Treasury and the Department for International Development. Microcredit is the best known area of microfinance and has long been dominated by public sector donors providing funds to small lenders in the developing world. In recent years the private sector, led by institutions such as Citigroup, has become increasingly active. Seventy-four commercial and quasi-commercial microfinance funds have been set up in the past two years and their total investments add up to $2bn, according to CGAP.
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Press Coverage 
