The FSAP process is designed to identify and assess strengths and weaknesses in financial systems from a best practice standpoint including: assessing financial institutions’ structure and soundness; reviewing systemic risks in payment systems; examining the legal framework and the system of official oversight and prudential regulation and supervision; and assessing institutional arrangements for crisis management, including financial safety nets. Iran is addressing these aspects of the financial infrastructure and, in formulating and implementing their reform programme, Iran has maintained a constructive engagement with the IFIs. I am particularly pleased that the Bank of England will be involved with an IMF-World Bank led technical assistance team on financial sector restructuring and supervisory and regulatory frameworks for banks in Iran during the coming year. Another key element of efforts to strengthen the international financial architecture has been the development and implementation of a range of international standards or codes of good practice. These codes are not meant to lay down strict or inflexible rules. They are designed, however, to promote best practices, while recognising that financial systems are likely to differ across countries and across time. The IMF and the World Bank, working together with the relevant standard-setting bodies, have been helping economies undertake assessments of their observance of some of these standards. BIS Review 83/2000  2  Iran is currently working towards the adoption of internationally accepted best practice standards in a number of areas.

However, with the credit reference bureau now operational, to which I believe most of these institutions subscribe and access credit information on their borrowers, it is expected that the levels of delinquencies that the sector used to suffer through the non-repayment of loans by customers would decline. I therefore, implore all microfinance institutions to comply with the Bank of Zambia Directive of December 2008 regarding the use of the credit reference system and submission of credit data. I must emphasise that regulatory action will be taken against defaulting institutions. As I conclude, allow me to further urge microfinance and other financial institutions to continue revising their interest rates and charges in tandem with the movements in key macroeconomic indicators such as inflation. I am conscious to the fact that all microfinance institutions are in business and are therefore expected to make profits. However, making super profits at the expense of the poor and vulnerable is regressive to economic development. There is a need to make financial services more affordable to the majority of our people as well as small enterprises in order to expand their operations, employ more people, and thereby provide an impetus to significantly reduce poverty levels in the country. Let me, once again, extend my gratitude to MicroFinance Transparency and the Association of Microfinance Institutions of Zambia for inviting me to officiate at this launch of the Transparent Pricing Initiative in Zambia. It is now my honour and privilege to declare the workshop on Transparent Pricing officially opened.