High-level policymakers from the member states of the Arab Monetary Fund (AMF), representatives from the private sector and members of select international organizations met with an intent to deepen the dialogue on improving access to quality financial services for enterprise and households, and the role of financial inclusion in supporting job creation and economic growth, on 10 November at the “Financial Inclusion and Employment in the Arab Region” conference held in Amman, Jordan.

The Central Bank of Jordan, the Arab Monetary Fund (AMF) and Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ), on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ), partnered to host the conference with support from European Union, the Consultative Group to Assist the Poor (CGAP) and AFI.

The event’s keynote address was delivered by Alfred Hannig, Executive Director at AFI, who emphasized to attendees that financial inclusion is an important conduit for robust and inclusive economic growth, without threatening stability, by providing people the tools to create more opportunities and build better lives for themselves. The address highlighted recent data that demonstrates a correlation between business borrowing and a lower unemployment rate, noting a one-unit increase in the percentage of adults who borrow for business purposes is associated with a statistically significant decrease in the unemployment rate.

Mr. Hannig brought attention to the current thinking of country-led approaches to financial inclusion, pointing toward the recently announced United Nations Sustainable Development Goals (SDGs), and the supporting Addis Ababa Action Agenda (AAAA) on Financing for Development. The new UN goals profoundly emphasize the necessity for country-led approaches for a range of targets, including financial inclusion and SME finance, with the AAAA stating:

We recognize that there are different approaches, visions, models and tools available to each country, in accordance with its national circumstances and priorities, to achieve sustainable development…We acknowledge the importance for international financial institutions to support, in line with their mandates, the policy space of each country, in particular developing countries. We recommit to broadening and strengthening the voice and participation of developing countries.

Mr. Hannig applauded the move away from imposing commitments on others, saying: “We appear to have reached a point of convergence, where the priorities of the international community are coming in line with the needs and realities of individual nations. I have seen an openness and respect between peers that gives me hope the financial inclusion challenges we face can be overcome—sooner than we imagine.”

It was noted that the AAAA also commits to work with private sector actors and development banks to promote appropriate, affordable and stable access to MSMEs, which create the vast majority of jobs in many nations and often lack access to finance, while the Agenda will consider “including financial inclusion as a policy objective in financial regulation, in accordance with national priorities and legislation (and) will expand peer learning and experience sharing among countries and regions, including through the Alliance for Financial Inclusion and regional organizations…”.

Finally, Mr. Hannig discussed the importance of the AFI Maya Declaration, the first global and measurable set of commitments by developing and emerging countries to unlock the economic and social potential of the 2 billion unbanked through increased financial inclusion, and covered how SME peer learning services have developed the AFI network since launch of the SME Finance Working Group (SMEFWG) in 2013, including SME finance policy grants and capacity building programs.

In recognition of this, at the 2015 Global Policy Forum, AFI members adopted, under the Maya Declaration, the Maputo Accord, which committed to:

Supporting access to finance for small and medium enterprises in acknowledgement of their shared objective with financial inclusion in promoting sustainable and inclusive development as well as spurring innovation.

“The 32 AFI members adopting the Maputo Accord will now develop measurable commitments for SME finance with quantifiable targets, under the framework of the Maya Declaration,” said Mr. Hannig. “This is an important step in the right direction to help improve the livelihoods of MSMEs, and will ultimately contribute positively to the overall economy, improve the welfare of the poor and enhance financial stability.”

The conference also featured an important session on best practices in national financial inclusion strategies, where AFI members from the Bangko Sentral ng Pilipinas (BSP), the Bank of Tanzania (BOT) and the Palestine Monetary Authority (PMA) shared their experiences in formulating and implementing comprehensive strategies for financial inclusion.

The final session of the conference focused on enabling policies for financial inclusion with May Abulnaga from the Central Bank of Egypt presenting her country’s experience of policies for promotion of SMEs. In the same session, Robin Newnham, Head of Policy Analysis and Capacity Building at AFI, presented the key focus of discussions in AFI’s SME Finance Working Group (SMEFWG). Implementation of well designed financial infrastructure reforms and finding appropriate incentives for SMEs operating in the informal sector to formalize were identified as key priorities for the region.

Finally, the conference concluded with closing remarks from Maha Bahou of the Central Bank of Jordan reminding participants: “Central banks need to go beyond supervising to enabling…we are not policemen, we have to build capacity and help people to get a decent life”.

Following the conference, on 11 November 2015, at the invitation of the co-organizers, members of the AFI Financial Inclusion Strategy Peer Learning Group (FISPLG) delivered a one-day training on national financial inclusion strategies for 70 policymakers from the Arab region. The training covered global trends in national financial inclusion strategies, foundations of national strategies, the process of prioritization and target setting, and monitoring and evaluation frameworks for strategies.