THE SECRETARY-GENERAL

UNITED NATIONS NATIONS UNIES THE SECRETARY-GENERAL FOREWORD TO "BUILDING INCLUSIVE FINANCIAL SECTORS FOR DEVELOPMENT" (TO BE PUBLISHED BY THE UN CAPITAL DEVELOPMENT FUND IN PARTNERSHIP WITH THE UN DEPARTMENT OF ECONOMIC AND SOCIAL AFFAIRS March 2005 Building inclusive financial sectors improves people's lives, in particular those of the poor. A small loan, a savings account or an insurance policy can make a great difference to a low-income family. They enable people to invest in better nutrition, housing, health and education for their children. They ease the strain of coping with difficult times caused by crop failures, illness or death. They help people plan for the future. In many developing countries, small-scale enterprises and micro-entrepreneurs face severe financing constraints. But with access to finance, they can participate fully in the economic life of their societies, create employment for themselves and others, and realize their full potential. Where such businesses are given opportunities to develop, countries will have a better chance to flourish. Indeed, the importance of access to financial services was recognized by world leaders in the outcome document adopted at the 2005 World Summit. The designation of 2005 as the International Year of Microcredit has also helped to raise global awareness of the pivotal role that more inclusive finance can play in achieving the Millennium Development Goals. This publication aims to help policy makers develop national policies and strategies for building inclusive financial sectors. Based on experiences from around the world, it offers a menu of options for overcoming impediments to financial inclusiveness, and also covers the policy, legal and regulatory environments. It is the product of global multi-stakeholder consultations held during 2004 and 2005 as part of the follow-up to the Monterrey Consensus adopted by the International Conference on Financing for Development. In the true spirit of Monterrey, that effort involved the UN system, the World Bank and International Monetary Fund, the microfinance community, academia, civil society and the private sector. Inclusive financial sectors can go a long away toward breaking the vicious circle of poverty. But an unremitting effort by the international community will be needed. Let us all do our utmost to empower the poor, and to ensure that poor people around the world have access to a wider range of financial services. With more opportunities to build on their ideas, energies and visions, they will lead the way in working their way out of poverty with dignity. JUN

Annika Savill/NY/UNO 03/02/2006 05:24 PM To Ruxandra Ferascu/NY/UNO cc bcc Subject Fw: SG Foreword for Blue Book Forwarded by Annika Savill/NY/UNO on 03/02/2006 05:24 PM Edward Mortimer/NY/UNO 03/02/2006 05:19PM To Henk-Jan Brinkman/NY/UNO@UNHQ cc Richard Amdur/NY/UNO@UNHQ, Annika Savill/NY/UNO@UNHQ, Jaya Dayal/NY/UNO@UNHQ Subject Re: Fw: SG Foreword for Blue BookH) Thanks, Henk-Jan. If this is a UN publication, and if Ocampo officially requests an SG foreword, I assume the answer would be yes. We would obviously welcome your help with drafting a suitable text. Henk-Jan Brinkman/NY/UNO Henk-Jan Brinkman/NY/UNO 03/02/2006 04:51 PM To mortimer@un.org cc Richard Amdur/NY/UNO@UNHQ, savill@un.org Subject Fw: SG Foreword for Blue Book Edward, Would you support this idea (see below) of the SG providing a foreword in a Blue Book on microfinance? Compared to similar forewords he has done, I would certainly support this one! A phrase in some remarks of the SG on building inclusive financial sector has triggered a lot of action on this around the world! Maybe we can keep the fire going for a while with some new fuel? Henk-Jan Brinkman Senior Economic Affairs Officer Executive Office of the Secretary-General United Nations Room S-3275 G New York, NY 10017 Telephone: (212) 963-4742 Fax:(917)367-4113 E-mail: Brinkman@un.org Forwarded by Henk-Jan Brinkman/NY/UNO on 03/02/2006 04:47 PM Barry Herman/NY/UNO 30/01/2006 06:53 PM To Henk-Jan Brinkman/NY/UNO@UNHQ cc AlexTrepelkov/NY/UNO@UNHQ, Daniel

Platz/NY/UNO@UNHQ, Judith Brister/NY/UNO@UNHQ Subject SG Foreword for Blue Book Henk-Jan, In December, I think it was, we talked about getting a foreword from the SG to the "Blue Book" ("Building Inclusive Financial Sectors for Development"). The BB has been finished now for about two weeks and is on the web in advance, unedited form (www.uncdf.org/bluebook). So now the question of the foreword is no longer academic. I have retired (not obvious from this email, but nevertheless true) and so what I want to do at this stage is suggest you use your good offices to convince the SG to agree to a foreword (I cannot imagine he has anything else on his mind). We already have a preface signed by Ocampo and Dervis, to which Richard Weingarten has added his name as Executive Secretary of UNCDF (I can understand Richard's point, as UNCDF wants to be seen independently of UNDP; indeed, some UNDP staff say the UNCDF neoliberals do not represent the thinking in UNDP either, but that is all just between us independent economists). I am attaching the preface for reference. I think the SG's foreword should complement the preface (or rather the preface would complement the SG, being more technical than what he would say). He might have a paragraph on why we think financial inclusion is so important, giving households and small enterprises access most do not yet enjoy to basic financial services (safe savings, appropriate credit, affordable and efficient payments/remittances, and insurance to help cope with difficult times). Not only does this help poor households manage their affairs, but it also facilitates the emergence of micro and small enterprises, many of which can grow into significant sources of employment if given the opportunity. And that is what we need much more of in the developing world: growth of enterprise and employment opportunities, raising average income levels, overcoming poverty... [tears well up at this point]. A second paragraph could highlight that this book was the result of collaboration at many levels. It was a collaboration of several members of the UN family in New York, Washington, Geneva and the regions, but more unusually also of the different stakeholders in promoting financial inclusion, who came from microfinance institutions, from commercial and savings banks and credit unions, from governments and international organizations, from independent consultants and academia, from rating agencies and other parts of the financial infrastructure, from donor agencies and their networks. This type of collaborative process is unique: intense cooperation among disparate people, lasting well over one year around a single theme. This is one of the lasting outcomes of the Monterrey process on Financing for Development, embodying as well in this case the spirit mobilized by the collective efforts to promote and capitalize on the International Year of Microcredit, 2005. The United Nations can be proud to have nurtured this process. The BB is the outcome. We offer it to all the stakeholders who want to build inclusive financial sectors for development in the hope it helps advance their work. Judith Brister, on behalf of Jose Antonio, should work with whoever on your side of the street needs to get involved. The DESA team could be responsible as well to involve UNCDF and UNDP. I would only want to know that it is happening. Barry PS. Here are my new coordinates. I am at the New School Wednesdays to Fridays: Barry Herman Visiting Senior Fellow

Graduate Program in International Affairs The New School 66 West 12th Street, Room 605 New York, New York, 10011, USA phone: +1-212-206-3524, ext2070 fax:+1-212-924-1292 email: hermanb@newschool.edu Blue Book Web Preface.htm

FEB I 3 2006 1 Note to Mr. Malloch Brown EXr"UTIVE OFFICE OF THESICRF.;A[-Y-Gb'MF.BAl_ Subject: Secretary-General's foreword for the Blue Book on inclusive finance I am writingjojrequest that the Secretary-General sign a foreword to the forthcomingnbtue~book on "Building Inclusive Financial Sectors for Development", which "has" been released' in advance unedited form on the Internet and will be published as a book in a few months. It will also contain a preface signed by Mr. Dervis, Richard Weingarten (Executive Secretary of UNCDF) and myself. We would suggest that the foreword focus both on the importance of financial inclusion, and on the collaborative process though which the book was produced. Its significance as a lasting outcome of the Monterrey process on Financing for Development and its relation to the International Year of Microcredit 2005 might be highlighted as well. My Department would of course be pleased to prepare a draft for the speechwriters inyour office, if you agree. Jose Antonio Ocampo 8 February 2006