BTCA Becomes an Implementing Partner of the G20′s Global Partnership for Financial Inclusion

During the G20’s Global Partnership for Financial Inclusion (GPFI) meeting in Hobart, Australia, on May 6, 2014, the Better the Cash Alliance was invited to become one of its Implementing Partners, joining the World Bank, International Finance Corporation (IFC), Consultative Group to Assist the Poor (CGAP), Alliance for Financial Inclusion (AFI), Organisation for Economic Co-operation and Development (OECD) and International Fund for Agriculture Development (IFAD). In this interview, Managing Director Dr. Ruth Goodwin-Groen, who represented the Better Than Cash Alliance at the meeting, discusses the work of the GPFI, and some of the opportunities presented by this new role.

Q. What is the Global Partnership for Financial Inclusion, and how is it related to the G20?

Ruth: At the 2010 G20 Summit in Seoul, the Leaders of the G20 launched the GPFI, recognizing financial inclusion as one of the main pillars of the global development agenda, and endorsed a concrete Financial Inclusion Action Plan (G20 FIAP). The G20’s FIAP set up the GPFI to be a “consultative mechanism including non-G20 countries and other key stakeholders to maximize the impact of the G20’s work on financial inclusion.”

Q. Why has the G20 taken on global financial inclusion?

Ruth: The power of the G20 was really shown at the time of the 2008 financial crisis. Its members represent about 85 percent of the global economy and together they took action to avert a global depression. Since then, the focus of the G20 has been on recovery and growth.

Financial inclusion has been an important focus of the G20 under each of the last presidencies (it rotates every year), including the United States, Canada, Korea, France, Mexico, Russia and now Australia, because expanding access to financial services and bringing more people into the formal economy drives global growth and development.

Q. What does the GPFI do, and what has it accomplished in the last four years?

Ruth: The activities of the GPFI include promoting the G20 Principles for Innovative Financial Inclusion with governments, the private sector, international organizations and other stakeholders and highlighting the benefits of increased financial inclusion to economic and social welfare through households and firms.

It currently undertakes is work through subgroups on Small and Medium Enterprise (SME) Finance, Standard Setting Bodies and Consumer Protection and Financial Literacy. A Markets and Payments Systems subgroup has just been launched.

Three notable accomplishments by the subgroups include:

• Setting up the Small and Medium Enterprise Finance Hub – this hub addresses the lack of access to finance by the smallest businesses in developing economies which account for nearly 86 percent of employers and are crucial for economic growth;
• Three issues papers on the progress and challenges of Standard-Setting Bodies engaging on financial inclusion, which have contributed to their agendas, and;
• The G20 Basic Set of Financial Inclusion Indicators which define what is it means to be financially included and provide a holistic picture of the state of financial inclusion, in the recognition that better data is critical to inform financial inclusion policy making, globally and nationally

Q. Why is it important for the Better Than Cash Alliance to become a GPFI implementing partner?

Ruth: There are real benefits for the Better Than Cash Alliance. As an implementing partner we are now integrated into the global discussion on payments and financial inclusion at the G20 level. The G20 matters because member countries’ size matters as a share of the global economy; they have a leading role in the global financial system and because the G20 is a leaders’ group, it can bring political clout to drive consensus on financial inclusion.

Becoming an implementing partner also validates the work of the Better Than Cash Alliance to both G20 and non-G20 members and shows how important electronic payments are to financial inclusion, and to the global growth and development agenda more broadly.

Q. As a GPFI implementing partner, what responsibilities will the Better Than Cash Alliance have?

Ruth: The implementing partners function as a kind of secretariat to the GPFI through its four subgroups. The subgroups are directed by member country co-chairs, and the implementing partners support the co-chairs as requested.

Q. How can the Better Than Cash Alliance contribute to the GPFI’s work?

Ruth: Two things that us unique: First, we are specifically focused on the shift from cash to electronic payments as an on-ramp to financial inclusion. Second, we’re an alliance which integrates the private sector with governments and international development organizations as well as foundations. In an increasingly interconnected world it is essential that all relevant actors work together. As an implementing partner, we’re looking forward to bringing the expertise of all the members of the Better Than Cash Alliance to the work of the G20’s GPFI.