UNITED NATIONS CAPITAL DEVELOPMENT FUND    Microfinance

Issue 17 / October 2005

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In celebration of the great achievements of the International Year of Microcredit, the United Nations has invited various heads of state, ministers of finance, high-level representatives from the formal financial sector, and international NGOs to participate in an international forum promoting the concept of building inclusive financial sectors throughout the world. Following the forum on November 7 and 8, the United Nations will join Diana Taylor, New York State Superintendent of Banks, in hosting a seminar on banking regulation and supervision. The seminar, to be held on November 9, will consist of various panels with the goal of providing a fresh outlook on microfinance, emphasising the range of activities and suppliers, education in financial literacy, principles of regulation in the sector, and the role of the private sector. Mr. Kemal Dervis, Administrator of the United Nations Development Programme said of the event: "The United Nations is delighted that the New York Superintendent of Banks, Diana Taylor, has offered to host this event. The engagement of the private sector on the issue of increasing access to financial services for poor people is absolutely critical for stimulating economic growth and reducing poverty. This seminar serves as a clear demonstration that the world's poor form a huge untapped market that financial institutions must pay attention to."

The seminar will commence with opening remarks by Ms. Christine Cumming, First Vice President, Federal Reserve Bank of New York and Mr. Stanley Fischer, Governor, Bank of Israel and Chair of the Advisors Group for the International Year of Microcredit. The first panel is entitled "Encouraging Safety and Soundness with Diverse Providers: What is the role of regulation and supervision in advancing the reach of microfinance?" The panel will focus on the challenges faced in regulation and fostering growth amongst a diverse group of financial service providers. Opening with a presentation on the US experience of creating a competitive and diverse financial sector, the panel will then expand to include central bankers from developing countries, who will share their experiences on regulation and policy approaches to financial service providers likely to offer microfinance products and services to low-income or otherwise disadvantaged customers. The panel will be moderated by Ms. Ricki Tigert Helfer, Former Chairperson, FDIC. The panelists will include Mr. Charles Konan Banny, Governor, BCEAO; Mr. Carlos Daniel, Executive Director, Compartamos; Dr. Y.V. Reddy, Governor, Reserve Bank of India; and Mr. Armando Tetango, Governor, Central Bank of the Philippines.

The second panel, "Can regulators help expand the universe of microfinance and financial service 'clients' through financial education programs and consumer protection standards?" will be moderated by Ms. Maria Otero, President and CEO of ACCION International. Panelists will include Mr. Burhanuddin Abdullah, Governor, Central Bank of Indonesia; Mr. Fazle Hasan Abed, Chairperson, BRAC; and Mr. James Mwangi, Finance Director, Kenya Equity Bank. The panelists will discuss whether broad programs aimed at financial education and consumer protection will improve the outreach and quality of microfinance services, the challenges and responsibilities governments and regulatory bodies face in responding to consumer protection issues and the possibility of increasing education and outreach as a means of achieving greater acceptance of retail financial markets. The panel will also discuss governments' and regulatory bodies' roles in increasing transparency and ethical delivery of financial services to poor people.

The last panel of the day, "Commercializing Microfinance: Can a consensus be reached on how to expand relevant services to the unbanked?" will be moderated by Mr. Tom Easton, New York Bureau Chief of The Economist. The panel will focus on the role of regulation in the integration of the microfinance sector, whether regulation advances or impedes the commercial growth of the sector, and increased interest from the financial sector and its impact on outreach to microentrepreneurs and low-income consumers. Panelists will also discuss the impact of rating agencies and how regulation impacts the strategies of both local and international banks and investors. Panelists will include Dr. Ishrat Husain, Governor, State Bank of Pakistan; Mr. Madhay Kalyan, Director, US Division of ICICI Bank; Mr. Jack Lowe, CEO, BlueOrchard Finance; Mr. Mauricio Moura, Executive Manager, Unibanco; and Mr. Robert Annibale, Global Director of Microfinance, Citigroup.

Following the panels, President William J. Clinton will provide his insight on microfinance and the necessary steps for pushing forward towards worldwide inclusive financial sectors.

Ms. Taylor and Mr. Fischer will offer concluding remarks following the informative panels. It is the hope of the sponsors of the event including the United Nations Capital Development Fund (UNCDF), the New York State Banking Department and the Advisors Group for the International Year of Microcredit that the seminar will encourage increased dialogue regarding the advancement of regulatory systems and transparency in microfinance as part of building a stronger and more inclusive global financial sector.