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Background Information
 The United Nations Development Programme (UNDP) and the United Nations Capital Development Fund (UNCDF) will host a major conference on Financial Inclusion in Africa in Dakar, Senegal (the "Dakar Conference"). The Dakar Conference will be held on 5 and 6 June, 2006 at the Meridien President Hotel. The Conference will address the challenges and constraints to building inclusive financial sectors in Africa. The Conference will also assist policy makers and other stakeholders in their efforts to assure that poor and low income people and micro and small enterprises in Africa have access to a broad range of financial products and services. The Conference will build upon recent experiences at the national level in Africa and will utilize the framework and recommendations contained in the recently published Building Inclusive Financial Sectors for Development. In addition, the Conference will follow-up several of the initiatives and conclusions of the UN International Year of Microcredit. Inclusive Financial Sectors In most developing countries, financial services are only available to a minority of the population. Most people in these countries do not have savings accounts, do not receive credit from formal financial institutions, and do not have any type of insurance. They seldom make or receive payments through formal financial institutions. The limited use of financial services in developing countries has become an international policy concern. As the Secretary General of the United Nations has stated: "The stark reality is that most poor people in the world still lack access to sustainable financial services, whether it is savings, credit or insurance. The great challenge before us is to address the constraints that exclude people from full participation in the financial sector.... Together, we can and must build inclusive financial sectors that help people improve their lives." The reason for this global concern about widespread financial "exclusion" in developing countries is straightforward: access to a well-functioning financial system can economically and socially empower poor and low income people and micro and small enterprises and can help them to better integrate into the economy of their countries. Access to financial services also, actively contributes to their human and economic development, to the economic growth of the countries where they live, and to the social safety net that can help protect them against economic shocks. Despite the broad consensus of the importance of "microfinance" as a poverty alleviation tool, CGAP estimates that between two and three billion people around the world are still excluded from access to financial services. The situation is particularly dire in the Least Developed Countries where often more than 90 percent of the population is excluded from the formal financial system. The Least Developed Countries are those where the average income is generally less than $1 per day, and most of the Least Developed Countries are in Africa. The Blue Book on Building Inclusive Financial Sectors for Development During the International Year of Microcredit (2005), the United Nations called together a large number of global decision makers and financial sector leaders to explore why the majority of the world's poor people and micro and small enterprises are denied access to basic financial services. This global consultative process resulted in participation from governments, international development organizations, a wide variety of financial institutions, the private sector, academia, and members of civil society from more than 100 countries. The World Bank, the International Monetary Fund, the Consultative Group to Assist the Poor, the African Development Bank, the Asian Development Bank and many other development and microfinance institutions around the world contributed to this global consultation. This global consultation was organized and sponsored by the United Nations Department of Economic and Social Affairs (UNDESA) and the United Nations Capital Development Fund (UNCDF). The result of this year-long consultation is Building Inclusive Financial Sectors for Development, also known as "The Blue Book" because of its UN sponsorship. The Blue Book was prepared as a tool and a guide for policy makers who seek to build inclusive financial sectors in their countries. The Blue Book sets forth a vision of inclusive finance, evaluates various factors limiting access to formal financial services, identifies critical challenges for microfinance institutions seeking to access financial markets, discusses the policy framework and public sector role in inclusive finance, considers a variety of regulatory and supervisory issues related to financial inclusion, articulates key policy issues and strategic options that policy makers must confront when seeking to build inclusive financial sectors, and describes a process that policy makers can use to establish a national dialogue to broaden and deepen access to financial services among the poor. The Blue Book was released on 17 January 2006 and is available at www.uncdf.org/bluebook. The printed version will be available in June 2006 and will be available in English and French for the first time at the Dakar Conference. Focus on Africa at the Dakar Conference  The Dakar Conference will focus exclusively on the issues and challenges involved in building inclusive financial sectors in Africa, where more than half of the region's population (approximately 300 million people) lives in extreme poverty. Only about 4% of the population has a bank account, and the number of bank deposits per person is far below other regions. In addition, only 1% of Africans has obtained a loan or other form of credit from a formal financial institution, and the number of loans per person is will below the number in other areas. As a general matter, microfinance institutions (MFIs) in Africa have not developed toward sustainability as rapidly as in other regions of the world, and the number and reach of MFIs in Africa is still far below what would be required to provide an appropriate continuum of financial services to all. Further, legal, policy, and regulatory environments in Africa too frequently constrain, rather than encourage, financial inclusion, and financial services infrastructure is too often inadequate for the efficient delivery of a broad range of financial products and services. Within this context, the Dakar Conference will consider financial sector development issues in Africa. It will place these issues within the analytical framework established in the Blue Book, and it will provide a forum for an in-depth discussion among multiple stakeholders of the challenges, constraints, and opportunities for building inclusive financial sectors in Africa. It will be a conference largely planned and attended by people from Africa, and it will focus primarily on current experience and issues in Africa as identified and perceived by policy makers and practitioners who are now active in African financial markets and financial sector development. UNDP and UNCDF: "Building Inclusive Financial Sectors in Africa" In 2004, UNDP and UNCDF joined efforts to build a regional programme for for financial inclusion in Africa. This joint programme is known as "Building Inclusive Financial Sectors in Africa," or BIFSA. BIFSA's goal is to contribute to the achievement of the Millennium Development Goals (MDGs), particularly the specific goal of cutting poverty in half by 2015, by increasing sustainable access to financial services in sub-Saharan Africa for poor and low-income people and for micro and small enterprises. The BIFSA Programme has begun to work in six countries. It follows a three-step process of Financial Sector Developlment approach which includes (i) conducting a financial sector assessment in each country, (ii) working through an open, participatory process with multiple stakeholders to develop policy, strategy, and a national action plan for building an inclusive financial sector, and then (iii) assisting policy makers and a broad range of financial institutions, development agencies, the private sector, and other financial market participants to implement this action plan. BIFSA seeks to maximize national ownership of inclusive financial sector development and to ensure the sustainability of policy, legal, and regulatory environments and of financial service providers in the country. At the Dakar Conference, UNDP and UNCDF will share much of their experience in building inclusive financial sectors in Africa. Many representatives from countries throughout Africa have been invited to share their experiences and lessons that they have learned. In addition, policy makers from many governments and regulatory authorities in Africa and representatives from many banking institutions, MFIs, development agencies, the private sector, academia, and civil society in Africa have been invited to talk about the challenges and constraints they face, the best practices that they have developed, and the challenges that they see for the future. UNDP and UNCDF will present the BIFSA Programme at the Dakar Conference and will seek opportunities for expanding its activities in Sub-Saharan Africa. Participants will be encouraged to suggest new areas of focus for BIFSA and to help broaden and strengthen BIFSA's work.
The Dakar Conference will have the following objectives:
The Dakar Conference will have the following expected outcomes:
The Dakar Conference will gather around 200 participants from Governments, Central Banks, development agencies, MFIs and other financial service providers and their associations, private sector financial institutions, academia, civil society, donors (including CGAP) and investors, UN Agencies and Bretton Woods Institutions. It is expected that 150 participants will be from the Africa region, and 50 participants from other regions.
Speakers and moderators will comprise representatives from Ministers of Finance, Central Banks, development agencies, private sector financial institutions, donors, MFIs and other financial service providers and their associations, UNDP, UNCDF, The World Bank, CGAP, IFAD, ILO, and others. Many of the speakers and moderators will be from Africa or from institutions working in Africa.
Currently, 150 rooms have been reserved at the Meridien President Hotel in Dakar. Arrangements have been made for additional hotel rooms around the area of the Conference venue.
Makarimi Adéchoubou, Regional Technical Manager for UNCDF Microfinance for Western and Central Africa, is leading a team of UNCDF and UNDP to organize and manage the Dakar Conference. The team is based in Dakar and is supported by the UNCDF Headquarters in New York. Below are the team members and their contact information:
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