Posts Tagged ‘Financial Services’

“This country that we sit in is a great country. And it’s a great country because it’s not just a country, it’s an idea. And that idea was supposed to be contagious – it’s bound up in the idea of the inalienable rights of men and women and children, equal in the eyes of God.” This morning, at the opening of the 4th Annual Meeting of the Clinton Global Initiative in New York, Bono called each of us to action. He asked us to place the current financial meltdown in a larger context – to remember the privilege from which we come, and of our responsibility to help those who have been living with this kind of insecurity for their entire lives. Joining him on stage, President Ellen Johnson Sirleaf of Liberia, Vice President Al Gore, and fellow panelists introduced the four focus areas of CGI – Poverty Alleviation, Climate Change, Education, and Global Health. Queen Rania of Jordan highlighted in particular the need for a paradigm shift in how we view education – that we must see it not just as the responsibility of government, but of everyone. This shift is needed across all issues – for we each must have a stake in improving these pillars of society.

As Working Group Chair for the poverty track, I structured each of our panels to address a core dimension of poverty. We began today with a panel discussion on strengthening financial services for the poor. While we in the rich world consider ways to rescue and repair our financial services industry, 2.3 billion people in the world have been living without access to any financial services. Even in the face of frightening developments in our own markets, we must work to reach these people. Confidence makes or breaks financial systems – and right now, we lack it. Robert Rubin, former Secretary of the Treasury in both Clinton Administrations, and now Director and Chairman of Citi’s Executive Committee, spoke on the panel about the current financial melt-down and its implications for the poor. He identified our situation as a “crisis of confidence,” and emphasized that we must address it as such. We need responsive action to restore confidence, and must prepare for the hugely consequential challenges this crisis poses, especially in helping the poor move in to the mainstream.

Dr. Julio Frenk, a Senior Fellow for the Global Health Program at the Bill & Melinda Gates Foundation and Mexico’s former Minister of Health, spoke powerfully on the links between health and poverty. He believes health insurance is crucial in mitigating the risks that drive people in to poverty, and that micro finance institutions should work in partnership with government to provide health services. He noted that the high cost of health and medical care has driven more than half a billion people in to poverty around the world. As President Clinton said almost fifteen years ago, millions of people in the world are only one serious illness away from losing their savings. We must provide services to help the poor protect their assets in the face of these risks. Fazle Abed, Founder and Chairman of BRAC, highlighted the regulatory constraints that currently limit NGOs from accepting savings deposits, thereby forcing microfinance institutions to borrow money to provide loans, which is not a sustainable model. CEO and Managing Director of Equity Bank in Kenya, James Mwangi argued that we should adopt a philosophy of “taking banking services to the people,” which Equity Bank does through mobile vans powered by solar panels and equipped with simple computer technology that travel to poor villages. The poor need savings products that are structured with no restrictions regarding frequency or amount – Mwangi believes this simplicity is key to usability.

Our audience participants concluded that we must decrease fraud, improve transparency, encourage cross-sector collaboration, and impose new regulations to ensure stability and flexibility in financial services – advice we can all appreciate, and should bear in mind as we react to the crisis in our own financial system.

Jane Wales
President & CEO, World Affairs Council of Northern California
Working Group Chair, Poverty Alleviation, Clinton Global Initiative

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