01:00 GMT +318 November 2018
Listen Live
    A beggar in Santorini, Greece.

    Access to Financial Services is Important in Fight Against Poverty – Expert

    CC BY 2.0 / Henrik Berger Jørgensen
    Opinion
    Get short URL
    0 0 0

    The Global Forum of the Alliance for Financial Inclusion (GPF) was held this week in the Russian city of Sochi. This year's event marked the 10th anniversary of the forum where policymakers discussed the latest technology innovations and progress made in financial inclusion.

    Sputnik has discussed this with Christopher Calabia, Senior Advisor, Supervisory & Regulatory Policy, and Senior Program Officer, Financial Services for the Poor, Bill & Melinda Gates Foundation.

    Christopher Calabia: Access to financial services is viewed as an important element in the fight against poverty because when people lack access to the right financial tools they have difficulty saving for their futures, they have difficulty paying their bills; they have difficulty borrowing to invest in businesses and so on. And so the Gates Foundation believes that in order to help people rise out of poverty it is important to give them access to the appropriate financial tools.

    Sputnik: Which digital financial services are the most effective in the countries with high a percentage of poverty?

    Christopher Calabia: I would say it's a range of different types of services. Some are offered by banks through mobile banking, some are offered by non-bank providers again using mobile phones, like mobile money and I think one of the most important technologies is the mobile phone actually.

    READ MORE: EXCLUSIVE: Media and Politicians Created UK Drug War, but Police Fighting Back

    And where mobile phone ownership is high you have an opportunity to serve larger portions of the poor because the poor sometimes live in regions that are not well served by banks or there are not many bank branches. But if they have a phone they may be able to get access to financial services that way.

    Sputnik: What digital financial services are the most popular in your foundation?

    Christopher Calabia: I would say it's a combination of mobile banking and mobile money. That's the product offered by non-banks.
    Sputnik: What new developments can be available in the future in your foundation?

    Christopher Calabia: I think the emergence of new types of technology companies that are sometimes called FinTech companies may be good providers of financial services in the future if they are appropriately regulated. So I think FinTech offers some possibilities. Also certain types of large digital platforms, sometimes called super platforms, like messaging applications or social media.

    READ MORE: Argentina Cuts GDP Growth Outlook to Negative, Forecasts Poverty to Rise

    Some of these large international companies are offering payment services and so that's a possibility in the future as well, but this is all very new. So we have to see how they develop and it will be important to ensure that they operate safely and soundly and that consumers are protected when using these types of financial services.

    Sputnik: On the Gates Foundation website you say that: "We believe that people are poor because markets don't work for them." What are the key reasons for that?

    Christopher Calabia: I think one of the key reasons is simply that in some countries the poor don't have access to markets or they don't have access to financial tools and services and so they're left out from the formal economy in many cases and that can be a big challenge to overcome.

    Sputnik: What are the key factors of improving financial accessibility in markets?

    Christopher Calabia: First of all, ensuring that they have access to the right tools. And ensuring that when they do gain access to those tools that there are good protections for them; that there are good opportunities to educate them about how to use these services.

    The views expressed in this article are solely those of Christopher Calabia and do not necessarily reflect the official position of Sputnik.

    Related:

    Argentina Cuts GDP Growth Outlook to Negative, Forecasts Poverty to Rise
    Growing Inequality and Poverty in the US: Economic Theories for Change
    Indycube Founder on UK Poverty Rate: 'We Have a System that Just Doesn’t Work'
    Child Poverty Rises, While Incomes Fall in Poor UK Households
    Tags:
    financial services, banking, poverty, Bill & Melinda Gates Foundation, United States
    Community standardsDiscussion
    Comment via FacebookComment via Sputnik