I have noted from the programme, with excitement, that in addition to the presentation on the Process of Product Development by Microsave, there will be several presentations on the experiences of different institutions from various countries. In this regard, it is our sincere hope that these experiences will not only provide a rich learning ground to upcoming microfinance institutions to enable them establish themselves in the market, but also that these experiences will enable established microfinance institutions to consolidate their positions in the market. Invited Guests, Ladies and Gentlemen, As you may all be aware the microfinance industry has emerged to meet the financial needs of people who have had limited or no access to the traditional sources of credit and other financial services. Lack of credit facilities, rural and agricultural finance is one of the major contributing factors to the poverty of this rather large segment of our populations. Microfinance institutions are and can be efficient and effective channels for mobilizing savings, credit, in-country remittances, and insurance services to lower-income people, particularly in those areas where traditional financial services are hardly there or do not exist. Microfinance is also increasingly being seen as an effective tool for poverty reduction. Moreover, when microfinance is provided in an environment where there are sufficient alternatives for diversified household income generation, and where access to information, appropriate physical infrastructure, and integrity in loan repayments are present, can be and it is a key success factor in reducing poverty.

More than half of Turkey’s population is under the age of 30. However, unemployment rate for the young population stands at 21.2%. In order to unleash our potential, we need to keep investments at high levels and utilize human capital effectively. Since domestic savings rate in Turkey is not high enough to finance investments, we need to attract foreign savings, which implies having  BIS Review 79/2008  1  current account deficit. But the good news is that the quality of financing has improved significantly in recent years. The FDI inflows were more than USD 20 billion in each of the last two years. Nevertheless, I should say that ratio of greenfield FDI to the total FDI is relatively low yet. I believe that the greenfield FDI will also increase in the following years as we keep the macroeconomic and political stability in place and continue to improve the business environment. The second comparative advantage that I would like to underline is the convergence story of Turkey to European Union. Steps taken during the negotiation process will undoubtedly increase the momentum of Turkey and help unlock the growth potential of the country. European Union membership is our medium-term anchor and all parties in Turkey should adhere to this aim decisively. Dear Guests, The best way that a central bank could support sustainable growth is reaching and maintaining price stability, especially in a country that experienced high and chronic inflation for decades. As you may know, Turkey has adopted the full-fledged inflation-targeting regime in 2006.