Financial inclusion and poverty reduction: the role of ... - uncitral

31. In fact, working with the Governments in defining comprehensive social protection
programs could be the first step – an important step ‐ in facilitating the participation of
the poorest of the poor in the microfinance market making it further inclusive. Targeted
and gender responsive approaches to offering minimum social floors to address
extreme poverty and income security can significantly contribute to achieving MDGs
including by creating sustainable livelihoods. For instance Bolsa Familia conditional cash
transfer program of Brazil resulted in reducing the poverty rate from 42.7% to 28.8% in
5 years of its starting in 2003. The National Rural Employment Guarantee Act (NREGA)
introduced the system of payments to the workers through accounts opened in the
Banks or the Post Offices resulted in opening of 2.5 million accounts for the workers just
in Karnataka State.
32. The role of the private sector as an important change agent has to be complemented by
effective government policies. These are necessary to create an enabling environment
for attracting investments, ensuring competition, augmenting equity, inclusiveness and
social protection, use of new technologies and facilitating new markets. Public–private
partnerships can widen the consumer base and create and enhance access to basic
goods and services through appropriate delivery mechanisms and a transparent,
accountable, participative and competitive environment.
33. Simultaneously there is a need to develop capacities at the human, institutional and
system‐wide levels to implement and enforce policies effectively for inclusive markets.
Capacity development efforts have to be directed at (i) offsetting the risk of new
products for the commercial sector, (ii) creating greater access to unreached consumers,
(iii) introducing new technology, (iv) enhancing consumers’ financial and technical
education , (v) bringing in private sector entrepreneurial skills to improve the financial
infrastructure, and (vi) setting service and credit standards.
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