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CGD’s work in this area focuses on strengthening financial systems in development countries through innovation and regulation.
Greater access for the poor to the formal financial system—including payments, savings, credit, and insurance—can greatly improve household stability and development prospects. CGD examines how to strengthen, broaden, and deepen financial systems in developing countries through innovation and regulation. We also study the effects of financial crises, to avoid and mitigate future shocks, and how developing countries can improve their business climates to spur inward investment.
CGD continued its commitment to the subject of financial inclusion with the release this March of Financial Regulations for Improving Financial Inclusion. As co-chairs of the Task Force that produced this report, we are enthused to see much alignment between the High-Level Principles of the G20 and the CGD Task Force report.
Keeping in mind the low levels of financial inclusion in the country, the Indian authorities have developed a broad strategy to improve access to financial services, as outlined in the report by the Committee on Comprehensive Financial Services for Small Business and Low Income Households, led by Nachiket Mor. Among the committee’s recommendations, payments banks are one innovative tool to further India’s goal of greater financial inclusion.
Five thousand researchers, practitioners, advocates and others are descending on Copenhagen for Women Deliver, the largest conference focused on the health, rights, and well-being of women and girls. Much of what will be discussed aligns with CGD’s own work through our global health policy and gender and development programs, so we’re pleased to be attending and below, we’re pleased to share with you a few of the conference areas where we can add our voice.
Does broadening financial access to large segments of the population pose risks to financial stability? Not necessarily, according to recent remarks by IMF managing director Christine Lagarde. Increasing access to basic financial transactions such as payments does not threaten financial stability, especially when appropriate supervisory and regulatory frameworks are in place. In fact, with the right regulatory supervision, increased access to financial services can result in both micro and macro benefits. Recognizing the macroeconomic and regulatory dimensions of financial inclusion, CGD and the IMF joined forces for a seminar to kick off the IMF Spring Meetings 2016.
At a CGD event on financial inclusion, IMF Managing Director Christine Lagarde noted that financial inclusion is a priority for the post-2015 development agenda as a whole. Here we explore both the benefits of financial inclusion and some concrete steps for achieving it, specifically looking at ways to overcome a persistent gender gap that leaves women with less access to financial services than men.
Poor regulation is a key obstacle to financial inclusion. An enabling regulatory environment is critical for creating incentives for businesses to offer innovative financial services to the poor, and for underserved customers to take up formal financial services.
While exciting new technologies for mobile money transfer deservedly make the headlines, there's a drier aspect of financial inclusion that doesn’t get as much attention: regulation. Liliana Rojas-Suarez visits the CGD Podcast to explain how better regulation can improve both financial inclusion and financial stability.