CARE Calls for Global Solution to Address Financial Exclusion

CARE Calls for Global Solution to Address Financial Exclusion

Posted
1/23/14

Banking on Change, a partnership between CARE, Barclays and Plan is calling for the development of international principles to help the 2.5 billion people with no access to formal financial services. 

Banking on Change, a partnership between CARE, Barclays and the charity Plan is calling for the development of international principles to help the 2.5 billion people with no access to formal financial services. Since 2009, Banking on Change has used a savings-led approach to financial inclusion that has already opened up access to basic financial services to over half a million people. It is the first partnership between a global bank and international NGOs to successfully link informal savings groups to the formal banking sector.

Recognising that to scale up financial inclusion, many organisations will need to work together, the partnership is calling on other individuals and institutions to engage in the development of a set of international principles, the ‘Linking for Change’ Charter. The draft charter builds on the experiences of, and lessons learned through Banking on Change over the last four years. Following this dialogue, we plan to build an Alliance of 100 leading organisations who will support the principles and can help develop new savings products for poor communities in the developing world.

Today 2.5 billion people still lack access to formal financial services. With the right support, these people could save $145 billion a year.(1) Extending formal banking services to the world’s poorest communities will improve their quality of life through increases in household income, investments in microenterprises, and spending on healthcare and education.

The Linking for Change Charter is the focus of a discussion at the World Economic Forum in Davos during a breakfast event hosted by Barclays Group Chief Executive, attended by CARE USA President and CEO Dr. Helene Gayle.

Leading the discussion to develop the Charter, Antony Jenkins commented, "Linking informal savings to formal banking creates both social and commercial benefits. It has the potential to transform the lives of vulnerable and disadvantaged people, while at the same time, enabling us to support more customers and grow our business. However, one of the most significant things we’ve learnt from this partnership is that we can’t fulfil the scale of this ambition alone. We need further collaboration between banks, NGOs, governments and technology providers. That’s why we’re calling for input and support to establish international principles for savings-led financial inclusion."

Dr. Helene Gayle, President and CEO of CARE USA, added, "The Linking for Change Charter gets back to basics about responsible banking for the world’s poorest people. Only 37 percent of women in poor countries have access to basic financial services, savings, credit or insurance. Basic access to finance creates incredible gains for women by increasing household income and boosting confidence and dignity. The Charter has huge potential. It's an opportunity for banks to tap into a huge pool of potential economically active customers, worth an estimated $145 billion."

Nigel Chapman, CEO of Plan International, said, "Here at Plan, we recently reached the one million members mark for our savings groups worldwide. Banking on Change, our partnership with Barclays and CARE, has been a vital and flagship project. We believe that young people must have better access to trusted financial services if they are to develop, but with so many people still lacking access to banking solutions, it is a problem that we must solve together. That’s why we are calling on others to support our joint vision for the Linking for Change Charter."

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(1) Our experience shows that, with support, individual informal savers save around $58 per year.  

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Photo: Banking on Change/Will Boase

 

 

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