Queen Maxima of Netherlands in India to discuss Inclusive Finance for Development
Queen Máxima of the Netherlands is visiting India in her capacity as the UN Secretary-General’s Special Advocate for Inclusive Finance for Development. The focus of her visit is India’s pioneering role in inclusive finance.
This visit comes just three days after the visit of the largest Dutch delegation to India led by the Dutch Prime Minister Mark Rutte. [read more]
Prime Minister Modi and Queen Maxima discussed the various initiatives taken in the last few years by the Government of India for enhancing financial inclusion in India, such as Jan Dhan Yojana, Pradhan Mantri Jeevan Jyoti Bima Yojana, Pradhan Mantri Suraksha Bima Yojana, and Atal Pension Yojana.
The two leaders also discussed global development finance. Queen Maxima appreciated India’s efforts in this direction, through the Indian Technical and Economic Cooperation (ITEC) scheme and provision of concessional Lines of Credit for development projects abroad, based on the host government’s requirements and priorities.
The latest World Bank Group figures show that 80% of Indian adults now have a bank account. This is a significant increase compared to 2014, when only 53% had an account. The gap in access to an account between men and women has also shrunk from 20% in 2014 to 6% now. However, a major concern continues to be actual use of a bank account. Though 80% of adults now have an account, only 48% make any use of it. (WB: Global Findex 2017).
In Delhi, Queen Máxima held talks with representatives of NITI Aayog, the government think tank, and with the Indian Software Product Industry Round Table (iSPIRT), the private think tank that masterminded the India Stack.
She also met the external affairs minister Sushma Swaraj, interim finance minister Piyush Goyal and representatives of international development organisations and financial institutions.
Dr. Rajiv Kumar, vice-chairman of NITI Aayog said that after ensuring banking access to 300+ mn Indians, the next priority would be ensuring their participation in upscale value chain. He said that the NITI Aayog will nominate a dedicated officer to coordinate with UNSGSA & private players.
“Her Majesty emphasised financial inclusion as a means to accelrate toward numerous development and economic goals, a vision that NITI Aayog is also working to realise,” said Amitabh Kant, CEO of NITI Aayog.
According to a statement issued regarding her visit — “For many years now, India has been committed to facilitating access for all to official financial services, for example by combining policy with a single digital infrastructure — the India Stack — that can be used by the government, market parties and private citizens. The India Stack comprises three main elements: first, a biometric digital identity (number combined with a fingerprint and iris scan); second, a virtual personal payment address for the payment of salary or social benefits (a combination of ID number, bank account number and mobile phone number); and third, a Unified Payment Interface, enabling money transfers to, for example, family members through the virtual payment address. To supplement the India Stack, Prime Minister Narendra Modi’s government launched the Pradhan Mantri Jan-Dhan Yojana programme in 2014. One of the aims of this national programme for inclusive finance is to ensure that every family in India has access to a bank account.”
The Global Findex 2017, launched in April 2018, reveals a significant global rise in access and use of financial services around the world. More than half a billion new accounts have been opened since 2014, adding significantly to the momentum of financial inclusion and pushing the number of adults with accounts to 69 percent, up from 62 percent three years ago and 51 percent in 2011.
Speaking at the World Bank’s April 20 flagship event on financial inclusion Queen Maxima underlined the opportunity mobile phones offer: “We have one billion mobile phone owners who are financially excluded. That represents two-thirds of the total number of excluded — two-thirds of the work we still have to do.”
“In order to have a real impact on people’s lives our biggest issue is usage,” said Queen Máxima. “One in five accounts is dormant. Sometimes with digital accounts it is even greater.”
The uneven character of progress is evident in the new Findex data on women and the poor. The Special Advocate laid out the persistence of the gender gap: “Sixty-five percent of women now have an account, up from 58 percent in 2014. But what I find very frustrating is that since 2011 we have had a 9 percentage point gender gap in financial inclusion in emerging markets.” The persistent gap between the rich and the poor is even greater at 13 points.
To achieve the World Bank’s Universal Financial Access goal by 2020, “We need leadership from both the public and private sectors,” the Special Advocate remarked at the close of the World Bank event.
Internet-enabled payments are the second big tech story coming out of the Findex. In China, 57 percent of account owners are using mobile phones or the internet to make purchases or pay bills, roughly twice the share in 2014. And in India, the widespread use of a biometric ID has driven a big jump in account access, from 53 percent in 2014 to 80 percent. Findex data demonstrates that technology is making a huge impact — including through mobile money, internet-based platforms, digital ID, and fintech. In Senegal, mobile money has jumped from 6 percent three years ago to 32 percent; Paraguay from 0 to 29 percent; and Bangladesh from 2.6 to 21 percent.
Queen Máxima undertook a field visit to a project run by Aye Finance, an organisation that targets micro enterprises in a specific sector, such as the production of sports equipment. On the basis of digital information from the sector, the enterprise can acquire a loan that a mainstream bank would usually refuse. Aye Finance is developing mAye, an app enabling entrepreneurs to manage the day-to-day running of their enterprise, including acquisitions and sales, employee attendance and the status of their loan.
On Wednesday 30 May Queen Máxima will visit Mumbai where she will attend a meeting of the CEO Partnership for Financial Inclusion. This informal partnership of ten international enterprises (Ant Financial, AXA, Bharti Airtel, Mastercard, PayPal, PepsiCo, Rabobank, Santander Bank, Telenor and Unilever) first met on the invitation of Queen Máxima during the World Economic Forum in Davos in January 2018. The CEOs of these enterprises agreed to share their knowledge and experience of inclusive finance and to work together. The local CEOs will attend the meeting in Mumbai.
She will also have talks with representatives of the private sector in India on the development of client-driven financial products. While in Mumbai, she will also visit the dabbawalas. Mumbai’s dabbawala hot lunch delivery system is unique to the city. The Mumbai Dabbawala Association works with the digital bank Paytm, which provides the dabbawalas with a digital bank account so that customers can pay for their lunches by mobile phone.
The Little Data Book on Financial Inclusion 2018, World Bank, foreword by H.M. Queen Máxima, UNSGSA
In September 2009 Queen Máxima was appointed the UN Secretary-General’s Special Advocate for Inclusive Finance for Development (UNSGSA). In this capacity, she advises the Secretary-General, and works worldwide to make financial services accessible to all, including low-income groups and the SME sector. She has been honorary chair of the G20 Global Partnership for Financial Inclusion (GPFI) since 2011.
