A staggering 2.7 billion people in developing countries still lack access to formal financial services despite the plethora of services available in the developed world, Antonique Koning, of the CGAP EU/ACP Microfinance Framework Programme told the Development Policy Forum (DPF).

Those that did have access to finance were frequently only offered debt facilities with short-term repayment periods, added Graham Wright, Programme Director of Microsave India. “The poor need a range of financial services such as savings facilities, which are far more important than credit. We don’t give people assets by giving them access to debt – we are effectively asking them to run a marathon on one leg.”

The DPF roundtable, entitled “Innovative Techniques for the Developing World”, focused primarily on innovation to improve the distribution of financial services in developing countries, rather than on innovative products. Discussants broadly agreed that sufficient finance was available via donor counties and private channels, but that it was often not reaching the people for whom it was intended. The discussion produced a number of potential solutions to the problems of micro finance, including: a reduction in conditionality on the part of donor countries and institutions; improved infrastructure in emerging economies; introducing taxes aimed specifically at supporting the developing world; reducing restrictions on remittances.

Please click here to download the list the discussants who participated in the debate.

The Development Policy Forum (DPF) is a partnership between Friends of Europe, the World Bank, the United Nations, France’s AFD, UK’s DFID and Germany’s GTZ. DPF events are also organised in association with the Friedrich-Ebert-Stiftung, the IMF and the European Commission, and the World Savings Banks Institute (WSBI) also partnered us for this debate.