Satellite Seminar on Financial Inclusion held in conjunction with the 61st World Statistics Congress Opening remarks by Mr. Abdellatif JOUAHRI Governor of Bank Al-Maghrib Marrakech, July 14, 2017 “While data is important, the right data is essential” Albert Einstein Honorable Chair of the Irving Fisher Committee, Honorable Governor of the BEAC, Distinguished guests, Ladies and gentlemen, It is with great pleasure that I welcome you to Morocco on the occasion of this international seminar on financial inclusion, which will focus on data and their important role in developing policies and strategies that take into account on-the-ground realities and then measuring and assessing the impact of these policies. First of all, I would like to thank our partners, the Irving Fisher Committee on Central Bank Statistics and the Center for Latin American Monetary Studies for their valuable contribution to the organization of this event, held as usual on the sidelines of the 61st World Statistics Congress. The topic of our meeting further underscores the importance that central banks and international standardization bodies attach to financial inclusion. It is a subject that is of increasing interest to them, particularly with regard to its interactions with financial stability, resulting in hindering the policies put in place to develop access to and use of financial services. A sustainable and efficient financial inclusion requires a long-lasting balance between innovation and the safeguards that need to be developed in order to ensure the soundness of the financial sector. Ladies and gentlemen, As you know, financial inclusion has become an important factor in economic efficiency and social equity, and international organizations have, for nearly a decade, underlined its importance and the need for public authorities to adopt national strategies for financial inclusion. The World Bank considers financial inclusion as a key factor for poverty alleviation and has set itself the goal of achieving universal access to financial services by 2020. Under this framework, it targets 25 priority countries, including Morocco. To this end, it launched in 2012 the Financial Inclusion Support Framework (FISF), aligned with the Maya Declaration, to support the implementation of country commitments. For its part, the G20 has made financial inclusion one of its working themes, and in 2009 established an expert group who drew up the nine Core Principles for Innovative Financial Inclusion. In 2010, the G20 launched the Global Partnership for Financial Inclusion, including all G20 countries and interested non-G20 countries. This partnership helps strengthen coordination and collaboration between the various national and international stakeholders through its three key Implementing Partners: the Alliance for Financial Inclusion (AFI), the Consultative Group to Assist the Poor (CGAP), and the International Finance Corporation (IFC). Certainly, all these organizations, to name but a few, and policy-makers are aware of the increasingly critical role of data and its impact on the efficiency of the decision-making process, from the design phase to monitoring and evaluation. The use of rigorous, objective and reliable data helps to accurately assess the state of financial inclusion, set realistic goals, identify obstacles, design relevant policies and monitor and assess the impact. Based on this premise, several international initiatives have been launched to contribute to the development of standard indicators and study tools in order to better understand the components of financial inclusion and better analyze their impact on financial stability and integrity as well as on economic development and the population’s wellbeing. It is within this framework that the World Bank and the International Monetary Fund have developed surveys specifically designed to assess financial inclusion from the “supply” and “demand” side. The Global Findex is currently the most comprehensive global database to assess the financial behavior of individuals by analyzing the use of financial services in nearly 140 countries. The IMF’s Financial Access Survey, conducted annually since 2009, is another important source of data on financial inclusion. It provides an overview of the availability and use of financial services by individuals and firms by collecting appropriate information from various providers of financial services. Data collected through these surveys have enabled policymakers in several countries to benefit from the opportunities identified to further promote financial inclusion. They also provide analysts with a reliable basis for understanding the causal links between financial inclusion and financial stability, on the one hand, and between inequality and economic growth, on the other. In addition to surveys, international organizations have mobilized to develop a range of indicators to assess the different dimensions of financial inclusion. Since the Cannes Summit in 2011, the G20 has focused on developing financial inclusion indicators, including indicators on access to and use of financial services, financial literacy, and the quality of financial service provisioning and consumption, as part of a continuous reflection process integrating new international trends in this field, notably the development of new distribution models and the emergence of digital financial services. The AFI also published a set of basic indicators on access to and use of financial services in 2013 and on quality in 2016 with the aim of harmonizing data among its members by providing them with a common tool to ensure comparability and foster peer learning. Ladies and gentlemen, In Morocco, since 2007 both the Ministry of Finance and Bank AlMaghrib have considered financial inclusion as a major instrument to develop a comprehensive strategy of the financial sector by 2020 which aims to deepen the national banking market, develop capital markets and position our country as a regional financial hub. Through our commitment to the Maya Declaration in 2013, we announced our pledge to promote access to and use of quality financial services based on sound and solid foundations. That same pledge was reaffirmed in 2016 as part of the roadmap of aligning the Moroccan financial sector to sustainable development goals at the COP 22 held last year in Marrakech. This commitment reflects our willingness and determination to continue our financial inclusion efforts, which have enabled Morocco to become a regional benchmark, given the significant progress it has achieved in this regard. Such efforts have been reported by the World Bank and the IMF during their last Financial Sector Assessment Mission (FSAP) conducted in 2015. Ladies and gentlemen, Aware of the importance of data for designing relevant policies, Bank AlMaghrib has taken specific measures to develop, in line with international standards, a set of indicators which address two fundamental dimensions of financial inclusion: access to and use of financial services. As for the “quality” dimension, it is monitored for the time being through the Banking Services Price Index, which we developed in 2011 and which accurately reflects the cost and trend of banking services. Moreover, considering the weight of very small, small and medium enterprises (VSMEs) in our industrial fabric and their role in employment and wealth creation, we mobilized various public and private actors to establish an observatory for VSMEs. Founded in 2016, this observatory aims at (1) centralizing national and regional data and information on VSMEs, and (2) generating demographic, economic and financial information on economic sectors in order to allow stakeholders to respond more effectively to the issue of financing this specific category of companies. We have also established two credit bureaus, the first in 2007 and the second in 2016, in order to provide credit institutions and similar bodies with a common platform for the exchange of data. The objective of this platform is to help these institutions better assess the risks incurred on their counterparties, through solvency reports specifying the commitments of their customers and their payment behaviors. It also allows Bank Al-Maghrib to measure the use of loans by the population and to evaluate the impact of actions taken on the supply and demand side. And in 2013 we launched, jointly with the World Bank, a survey on Moroccan households’ perception of financial services. This survey helped us identify the barriers hindering the development of financial inclusion and allowed us to better prepare our first national financial education strategy. A second survey called “Global FINDEX” will be conducted shortly and will serve as a basic diagnosis to define our national financial inclusion strategy. Ladies and gentlemen, The data collected over the past few years show the real progress made and the challenges ahead: disparities between regions, rural and urban areas, gender, data quality improvement and the development of an effective tool to measure impact. These challenges emphasize the need to continue our joint efforts, both nationally and internationally, and to get mobilized, in an overall and harmonized manner, to develop financial inclusion of the population across all segments. Data reliability is not an issue specific to Bank Al-Maghrib. This was evidenced by the last report of the Irving Fisher Committee on “Measures of Financial Inclusion - Central Bank Perspectives”, prepared on the basis of a survey carried out during the 4th quarter of 2015 in 47 countries. The findings and recommendations of this report, which will be debated at length today, reveal that it is of paramount importance to improve data in a much more concerted and shared framework for a better international coordination. Ladies and gentlemen, Our one-day high-level meeting will cover a number of themes that are challenging to all of us: Is financial inclusion a challenge for national financial stability? How does it affect monetary policy transmission? What measure should central banks take to safeguard the objectives of financial stability and monetary stability while improving access to financial markets? I remain convinced that making this gathering an annual tradition will enable us to provide the most appropriate responses to meet these challenges. I wish full success to this seminar and wish you a pleasant stay in Morocco.