On Wednesday, 14 December 2016, Finance Minister Wolfgang Schäuble met in Berlin with HM Queen Máxima of the Netherlands in her capacity as the UN Secretary-General’s Special Advocate for Inclusive Finance for Development (UNSGSA) and honorary patron of the G20’s Global Partnership for Financial Inclusion (GPFI).
During their meeting, Minister Schäuble and Queen Máxima focused on the question of how best to advance financial inclusion. The issue of financial inclusion is one of the central priorities that Germany has set for its G20 presidency in 2017.
While in Berlin, Queen Máxima participated in a bilateral meeting, internal expert talks and a round table discussion on the issue of financial inclusion attended by experts from the Finance Ministry, Development Ministry, Deutsche Bundesbank and other institutions.
Minister Schäuble stated:
Queen Máxima shared some interesting ideas on how to promote affordable and secure financial services that can advance financial inclusion. One of our main priorities during the German G20 presidency is to improve the access to and usage of financial services all over the world. Without access to adequate forms of financing, economic development is difficult. We are especially keen to promote access to financing for small and medium-sized businesses as part of our plans to build investment partnerships with Africa. In addition, we are committed to improving the conditions for remittances by making them safer and cheaper.
Queen Máxima congratulated Minister Schäuble on Germany’s assumption of the G20 presidency and praised Germany’s contributions to the financial inclusion agenda in recent years: “Germany has a strong financial sector and provides key support for financial inclusion around the world. Now, with the G20 presidency and the GPFI initiative, your country has the opportunity to press forward on this important issue and to prepare an international agenda focusing on implementation and results. It is important for the GPFI to focus on implementation and to maintain strong links between the GPFI and the G20. The GPFI should concentrate on those areas where it can facilitate real results, such as technology’s potential to advance financial inclusion, especially for small and medium-sized businesses.”
Queen Máxima and Minister Schäuble agreed that Germany will be playing an important role in laying the basis for the work that future G20 presidencies – including Argentina’s G20 presidency in 2018 – will be carrying out in this area.
As part of the G20 process, the German government today published a Priorities Paper on the issue of financial inclusion (www.bmz.de/GPFI). The government’s central priorities include measures to foster financing for small and medium-sized businesses and to improve conditions for remittances. The paper also outlines measures to advance financial inclusion in the digital field, to include vulnerable groups in this process and to support financial literacy.
The German G20 presidency will also examine alternative forms of small business financing in Africa, because the traditional methods for providing financing to small businesses are poorly developed in many African countries. In addition, the German government will identify and promote best practices for the development of Africa’s financial sector, including instruments for efficient risk mitigation, infrastructure and small business financing. Key proposals will be presented at the G20 Africa Conference in June 2017.
These and other issues were discussed in depth during the high-level round table discussion that was attended by Jens Spahn, Parliamentary State Secretary at the Federal Ministry of Finance, and Claudia Buch, Vice-President at the Deutsche Bundesbank.
Mr Spahn emphasised the role that digital financial innovation can play in enhancing global financial inclusion: “I am convinced that digital innovation in the financial sector will lead to greater and cheaper access to financial services and thus increase financial inclusion. The smart phone can bring banking to places where banks are probably never going to open up branch offices. FinTech companies from G20 countries that offer solutions to developing and emerging economies will create a win-win situation.”
Ms Buch highlighted the role that financial education and literacy play as prerequisites for financial inclusion: “Financial literacy has an important impact on economic decisions, with broad implications for individuals, the financial system and the real economy. The risks and costs of insufficient financial literacy should not be underestimated. In fact, financial stability starts at the individual level with informed financial decision-making, while regulatory and macroprudential policy measures can only serve as ultimate backstop mechanisms."
The issue of financial inclusion will be discussed further at the G20 Conference on Digitalisation organised by the Deutsche Bundesbank on 25 and 26 January 2017 in Frankfurt am Main.