Following the concerted focus on financial inclusion at the recently held G20 Summit in Korea in November, the leaders of the world’s 19 largest national economies and the European Union have formally announced the launch of the Global Partnership for Financial Inclusion (GPFI).

The GPFI is the main implementing mechanism of the endorsed action plan that G20 leaders agreed on during the Seoul summit and will function as an inclusive platform for G20 countries, non-G20 countries, and relevant stakeholders for peer learning, knowledge sharing, policy advocacy and coordination. Spearheading the implementation will be the three key implementing partners: AFI, the Consultative Group to Assist the Poor (CGAP), and the International Finance Corporation (IFC).

As a key implementing partner, one of AFI’s specific roles will be to facilitate the participation of non-G20 developing country financial policymakers into the activities of the GPFI. Additionally, AFI’s unique peer-to-peer learning model will also be extensively leveraged by the GPFI in spurring financial inclusion policy globally.

More than two billion people worldwide are excluded from the formal financial system and a larger proportion of such individuals live outside the G20 countries. Interestingly, it is also in these non-G20 nations that some of the most ground breaking and innovative solutions to inclusion are being forged and are emerging. Including non-G20 developing countries at the heart of the GPFI’s global mandate for inclusion, is a critical element of ensuring that programs and intentions are fully realized.

Commenting on AFI’s crucial role within the GPFI, AFI Executive Director Alfred Hannig said: “We are especially excited to be playing such a relevant part in this global effort and are looking forward to working hand-in-hand with G20 nations and GPFI partners in meeting the collective global mandate.

“We also applaud the G20 and GPFI partners for putting developing countries in control of the innovations and reforms in policy that they choose to unfold in their countries. This will enable countries to set their own targets for inclusion, which will, in turn result in far deeper ownership and commitment. We are confident that the results from this approach will be far more impactful than if a traditional ‘top down’ approach was taken.

‘In contrast to conventional approaches towards financial inclusion, AFI keenly advocates the concept of ‘polylateral development’. This is an intuitive approach which amalgamates peer-to-peer exchanges and globally lateral flows of knowledge and resources to create a more robust and enduring environment for true, sustainable growth and development.

“We feel that polylateral development is, in fact, the best way to describe the GPFI’s functional ethos and we are humbled, excited and inspired to see this concept being extended in this way, across the world,” he concluded.

Within the GPFI’s assigned Task Forces, AFI will contribute in three major areas:

• Application of the G20 principles for financial inclusion: In this area, AFI will concentrate on information sharing on a range of vital issues – current financial inclusion policy trends, innovative policy solutions from developing countries and the individuals and institutions driving those, and successful countries that have established a conducive policy framework for financial inclusion including relevant data – through its considerable network. AFI has also forged several collaborations between policymakers and other public and private entities for the advancement of financial inclusion, which it will leverage to meet the GPFI’s objectives in the area of partnerships.
• Standard Setting Bodies: AFI currently has an existing internal working group on financial integrity. This group has a mandate to open a line of ongoing dialogue with FATF on AML/CFT issues with the goal of finding ways that financial inclusion can help contribute to financial integrity and stability in developing countries and AFI will seek to migrate those learnings into the GPFI fold.
• Data and Measurement: Here again, AFI will draw on the extensive work already being done by its own internal working group on the subject of Data and Measurement for better policymaking. The objective in this area will be to identify best practice in data sets and methodology by taking lessons learned from existing practices around the world. It is also anticipated that this work in data and measurement will directly inform national strategies and targets for financial inclusion, which could ultimately lead to the setting of an evidence-based global target under the GPFI Data and Measurement Task Force.

Applauding the launch of the GPFI, Prof. Njuguna Ndung’u, Governor, Central Bank of Kenya and Chairman of the Steering Committee, AFI said: “I am sure that GPFI will serve as a highly effective platform in encouraging the G20 and non-G20 countries to jointly take financial inclusion to the next level.

“AFI is well positioned to bring in views from the developing countries, in particular the non-G20 nations, and to facilitate their valuable experiences in driving access to finance for the poor through smart policymaking,” he concluded.