Dutch Princess Máxima stresses access to financial services for rural development
Rome-based UN agencies meet at IFAD headquarters on financial inclusion of millions of poor rural women and men
Rome, 21 March 2013 – The International Fund for Agricultural Development (IFAD) hosted at its headquarters in Rome today an event titled: "Inclusive Finance, Challenges and Opportunities: The Rome-based Agencies Perspective." HRH Princess Máxima of the Netherlands gave in her capacity as the United Nations Secretary-General's Special Advocate for Inclusive Finance for Development, her perspective on the importance of inclusive finance for food security and reducing rural poverty.
The Princess began her remarks by pointing out where she hoped the interactive session would end: how the Rome-based UN agencies can use financial services in a way that can best help them advance their mandates of eradicating poverty and hunger, while at the same time help to advance the financial inclusion agenda even further.
Princess Máxima, a former banker, works with a variety of stakeholders to raise awareness and encourage universal access to financial services. As an active global voice on financial services for the poor, she is also Honorary Patron of the G20 Global Partnership for Financial Inclusion. In addition to the event, Princess Máxima will be in Rome until 22 March to meet with high-ranking officials of IFAD, the Food and Agriculture Organization of the UN (FAO), and the World Food Programme (WFP).
The Princess also emphasized at the event that financial inclusion enables and accelerates greater food production and food security by helping to increase agricultural production, linking farmers to markets and reducing risks for farmers and families.
Kanayo F. Nwanze, IFAD President, along with José Graziano da Silva, FAO Director-General, and Ertharin Cousin, WFP Executive Director, highlighted the challenges smallholders and rural entrepreneurs face in gaining access to rural finance.
"Only about 10 per cent of poor rural people in developing countries have access to even the most basic financial services from formal institutions," Nwanze said. "When women are able to take out loans and manage their household savings, their status improves. So does household food consumption, and the quality of life for children."
IFAD has long recognized the vast potential to improve the livelihoods of rural people by developing by increasing their access to a wide range of financial services and sound institution. IFAD is one of the world's largest lenders supporting rural finance for poverty reduction. As of December 2012, IFAD's ongoing investments in rural finance were more than US$900 million. Last year, IFAD's efforts reached more than 4 million active borrowers and close to 5 million voluntary savers, almost 70 per cent of which were women.
Nwanze said that the event was an "opportunity to further deepen our partnerships and to identify innovative solutions to the challenges we face, so that together we can make financial inclusion a reality for millions of poor rural women and men across the globe."
In his opening remarks, FAO's Graziano da Silva said that "financial inclusion for rural people is not a simple set of products or approaches. It is a dynamic long-term and multi-faceted process that can and should be combined with other actions such as social protection to form comprehensive and consistent rural and agricultural development strategies."
FAO and IFAD are part of the Capacity Building in Rural Finance Partnership and manage the Rural Finance and Investment Learning Centre, a dynamic portal that offers rural finance information and presents on-line training in English, French and Spanish.
"Financial inclusion is tightly linked to the future achievement of our urgent mission of ending hunger," Cousin said noting that WFP increasingly uses financial tools, such as vouchers and mobile technology, to deliver food assistance. "We are committed to the delivery of food assistance in ways that promote financial inclusion for those we serve."
WFP and IFAD are working together to increase the access of low-income farmers to weather index-based insurance and other risk-management tools through the IFAD-WFP Weather Risk Management Facility.
Event participants explored ways to provide smallholder farmers with tailor-made financial services, and how to better connect them to markets. Smallholder households, women entrepreneurs and young people in rural areas are in need of a range of financial products and services including savings and deposit accounts, money transfers and insurance. But often times, access to finance in the developing world – especially rural areas – is unevenly distributed. Promoting "inclusive finance" means intensifying the depth of outreach and providing services to marginalized groups, especially women, reaching beyond conventional microcredit to the people at the bottom of the economic pyramid.
Given the importance of agriculture to food security, nutrition and rural development, the event also involved discussions around how best to catalyse universal access to financial services to ensure inclusion into the post-2015 agenda.
More information about United Nations Secretary-General's Special Advocate for Inclusive Finance for Development can be found at www.unsgsa.org
Press release No.: IFAD/14/2013
The International Fund for Agricultural Development (IFAD) works with poor rural people to enable them to grow and sell more food, increase their incomes and determine the direction of their own lives. Since 1978, IFAD has invested about US$14.8 billion in grants and low-interest loans to developing countries through projects empowering over 400 million people to break out of poverty, thereby helping to create vibrant rural communities. IFAD is an international financial institution and a specialized UN agency based in Rome – the United Nations' food and agriculture hub. It is a unique partnership of 172 members from the Organization of the Petroleum Exporting Countries (OPEC), other developing countries and the Organisation for Economic Co-operation and Development (OECD).