UNITED NATIONS CAPITAL DEVELOPMENT FUNDUNITED NATIONS CAPITAL DEVELOPMENT FUND Microfinance Building Inclusive Financial Sectors: A Multistakeholder Dialogue Amman, October 12, 2004

UNITED NATIONS CAPITAL DEVELOPMENT FUNDUNITED NATIONS CAPITAL DEVELOPMENT FUND Microfinance The Context A Double International Commitment The Monterrey Consensus on Financing for Development (2002) is the basis of a commitment to building appropriate financial services for households, micro-, small and medium enterprises. The International Year of Microcredit 2005 is committed to promoting the building of inclusive financial sectors that help people improve their lives and launching a challenge to national governments.

UNITED NATIONS CAPITAL DEVELOPMENT FUNDUNITED NATIONS CAPITAL DEVELOPMENT FUND Microfinance Vision Scale up efforts and build industry capacity to meet unmet demand for microfinance Unmet worldwide demand for financial services is staggering Current supply of financial services reach only a small fraction of the six billion people in the world, mostly wealthy/corporate clients  Dramatically increase access to financial services  Establish prudential means to use microfinance most effectively to alleviate poverty Current Situation To reach our vision we need to: 100*GDP 10*GDP Av. Loan O/S The portion of poor clients served is small but rapidly growing 25 to 30 percent annually over the past five years Gap High income clients served Not served Low income clients served 0.5*GDP

UNITED NATIONS CAPITAL DEVELOPMENT FUNDUNITED NATIONS CAPITAL DEVELOPMENT FUND Microfinance Blue Book on Building Inclusive Financial Sectors Objectives and Outcomes Objectives  Develop a common understanding of the constraints to building inclusive financial sectors in different country settings and opportunities for action  Develop a compelling analysis, a “Blue Book on Building Inclusive Financial Sectors that will provide information, analysis and guidance  Adopt the “Blue Book” as a tool to stimulate concrete action at the country level. Outcome  The preparation of a “Blue Book on Building Inclusive Financial Sectors” to be submitted to the General Assembly in fall  Follow-up by national governments.

UNITED NATIONS CAPITAL DEVELOPMENT FUNDUNITED NATIONS CAPITAL DEVELOPMENT FUND Microfinance The Process Bringing together over the coming months a wide range of stakeholders though “multistakeholder dialogues,” direct interaction with stakeholder groups and contributions via the web site. Participants will address this basic question: “Why are so many bankable clients unbanked?” Consultations will culminate in a Global Meeting in May 2005.

UNITED NATIONS CAPITAL DEVELOPMENT FUNDUNITED NATIONS CAPITAL DEVELOPMENT FUND Microfinance Proposed Organization of Session Program  Introductory Statements  Round Table Discussions in small groups  Presentation of results  Discussion in Plenary and Conclusions  Identification of Ways to Pursue Dialogue in Middle East and North Africa Region

UNITED NATIONS CAPITAL DEVELOPMENT FUNDUNITED NATIONS CAPITAL DEVELOPMENT FUND Microfinance Round Table Discussions  On the basis of the set of questions provided as guidance, identify the five key constraints to greater access  Bring in examples based on your own experience  Identify the major challenges to the development of inclusive financial sectors over the next 5 – 10 years  Prepare one sentence vision statements on building inclusive financial sectors  Provide suggestion for further dialogue in the region. Why are so Many Bankable Clients Unbanked?