As more evidence is emerging on the positive link between financial inclusion and improved livelihoods of the poor, more countries around the world have embarked on financial inclusion strategies to improve access to and usage of financial services and products. The ultimate aim is to unlock the economic and social potential of the unbanked population whose financial needs have not been met. In fact, during the last 5-6 years, financial inclusion has become an important agenda in the fight against poverty and inequality. Today, this is clearly a compelling global agenda especially taking into consideration that one out of every three adults are excluded from formal financial systems—more so in developing countries among low income, rural, and female populations as well as among small businesses and surprisingly millions in prosperous nations.

As one of the main drivers of financial inclusion in the SADC region, FinMark Trust continues to play a critical role in the creation of inclusive financial markets that work for the poor. This is a challenging task which requires a combination of targeted actions aim at ensuring that indeed the poor benefit from financial markets as very often ‘’consumer centricity’’ is outside the radar screen of policy makers, regulators and financial service providers. These targeted actions are not possible without a clear understanding of the drivers and barriers that shape markets and on how poor people manage their financial lives. Accordingly, we have started unfolding the MAP methodology in a number of countries within and outside the SADC region. As a new cutting-edge methodology, MAP begins with a thorough national consultation process, followed by in-depth demand-side, supply-side diagnostics and regulatory analysis on the basis of which a national financial inclusion strategy or roadmap is developed. This strategy/roadmap will assist participating countries to realise their financial inclusion objectives as espoused in their commitments to the Maya Declaration and other national policies. We have taken the lead on MAP in the SADC region by providing support to the diagnostics and the implementation of the road map

While increased financial inclusion alone cannot eliminate poverty, they can make transformative contributions to the stability of poor households and improve the economic potential of small businesses and the vibrancy of communities. Accordingly, during the period under review, we have adopted a livelihood approach to obtain a better understanding of the financial landscape within the context of people’s lives and realities to identify actions and strategies that will improve the welfare of low-income households. On the basis of our understanding, we have continued to encourage policy-makers and regulators in the financial sector to focus on strategic reforms to create the appropriate enabling environment for improving the access, usage and affordability of financial services. These have proved to be challenging tasks as policy and regulatory changes require proximity engagement with a wide array of stakeholders which, in our experience, takes time and resources, especially in the regional context.

Going forward with the work we have started in financial inclusion, we have adjusted and aligned our 2015-2020 strategy to the requirements of the region with a view to contribute to the scaling up of financial inclusion to help strengthen economic activity, improve livelihoods, and reduce the footprint of poverty. Based on our current programme of work and the experience gained on financial sector development across the region, we have reorganized our work over the next five years around three broad pillars namely: regional financial integration, regional financial inclusion and thought leadership. These will allow us to make meaningful contribution to the inclusive growth agenda of the SADC countries. Whilst the core of our work has been focused on regional initiatives, the methodologies, information and expertise developed in the process has been applied globally and we will continue, with our global partners, to shape the debate on financial inclusion. Already we have started the process of global discourse in South East Asia and India.

During the period under review, two new international partners, the Bill and Melinda Gates Foundation and the MasterCard Foundations have joined the existing funders of FinMark Trust to provide funding for the establishment of a new centre to improve the quality, relevance and comparability of indicators of financial inclusion and the data needed to design effective programmes, products and policies. The centre will also address the use and quality of client centric data as well as the design of a greater range of more relevant and impactful financial products and services for the financially underserved individuals.

Cognisant of the increasing unintended negative consequences of financial inclusion on the poor, we have put more emphasis on policy and regulation, consumer empowerment and financial capability to better mitigate the risks of financial inclusion and adopt new ways of measuring the quality of financial inclusion. The contribution of financial inclusion to the real economy has become more prominent in our work with an emphasis on women and youth and how their livelihood strategies can be supported so that they do not fall back in the poverty trap.

All the work of the FinMark Trust would not have been possible without the generous financial support and commitment to the agenda of financial inclusion from UKaid from the Department of International Development (DFID) through its Southern Africa office as well as other funding partners. As we continue to bring and more and more of the unserved and underserved population into the fold of financial inclusion, it is my hope that our work will continue to be supported by our co-operating partners to meet the increasing demand from the recipient countries. It is estimated that in SADC out of the 97 million adults only 40% representing 39 million individuals are banked. The proportion of adults that are banked ranges from 85% in Mauritius to 12% in Mozambique. The work ahead is, no doubt, daunting.

I take this opportunity to thank the Chairperson and the members of the Board of Trustees for their usual guidance and oversight as well as their dedication and commitment to the work of FinMark Trust. Their inspiring and strategic leadership has turned FinMark Trust into a well-established centre of excellence on financial inclusion. I also take this opportunity to express my immense gratitude to the staff and theme coordinators who have put long working hours to make our success possible. They have distinguished themselves not from what they do, but how they do it!