the payment, clearing and settlement systems. notably the private sector has also initiated activities which will undoubtedly increase access to financial services. to this effect, the first mobile payment service provider was licensed to allow the transfer of money using mobile phones. in the same spirit of extending banking services to the unbanked, we approved a banking license to the first micro finance bank in namibia – that is built on the grameen bank concept. ladies and gentlemen, while these achievements are praiseworthy, it is important to note that more needs to be done. certain segments of our economy are still not benefiting from access to finance. in particular, small and medium - sized enterprises ( smes ), rural communities and the poor are still experiencing difficulties in accessing the services offered by the financial sector. according to the latest fin scope survey, more than 51 percent of the economic active namibians are unbanked or do not have access to financial services. the picture does not get any better with smes. the ncci namibian business climate survey of 2009 indicates that about 55 percent of informal business could not access credit, and 37. 1 percent of those that had access to credit, obtained this from friends and relatives. director of ceremonies, this trend is disheartening, especially for a country that exports national savings to other countries on a daily basis. last year alone, namibia recorded a net outflow of capital to south africa to the tune of n $ 7. 7 billion. year to date, the net outflows are already standing at n $ 8. 9 billion. imagine, what the impact would have been, had we retained just a fraction of that money for investment within the domestic economy. this trend is not sustainable for a country that aspires to be a developed nation by 2030. ladies and gentlemen, we cannot and should not continue with this status quo. we should, therefore, take tough decisions to reverse these trends, with the aim of further increasing access to financial services. our financial sector must become an important pillar of strength to our economy through financial inclusion. every economic activity, geographical region and segment of society must have access to financial services to ensure a more balanced economic growth and development. director of ceremonies, increasingly, world leaders have realised the importance of financial inclusion, as a critical ingredient for a stable economic growth and poverty reduction. therefore, financial inclusion is one of the issues to feature prominently on the agenda of g20 summit in seoul this november. a number of

emerging economies, such as india, malaysia and mexico, have developed and adopted coordinated policies on financial inclusion, as key strategies to enhance economic growth and alleviate poverty. malaysia, in particular, has gone an extra mile in this journey with its financial inclusion agenda. its success speaks for itself. today, malaysia ’ s unemployment rate is below 3. 4 percent, and its poverty rate stands at 3. 6 percent. thirty - seven years ago, the poverty rate in malaysia was 50 percent, and in 1987, the poverty rate stood at 20 percent. this is one of the countries, i believe, against which we should benchmark ourselves. it is imperative that financial inclusion becomes a high priority in our national agenda. we cannot afford to ignore the major role of financial inclusion in facilitating our efforts, policies, and strategies of achieving the ideals of vision 2030. in this regard, the bank of namibia has identified financial inclusion to be an important thrust in the bank ’ s developmental role. we have, therefore, made financial inclusion as one our key strategic objectives for 2011 and beyond. as a bank, we want to pledge our support and efforts towards this very important objective of having an inclusive financial system. our pledge is therefore set out in a four - point agenda : first, regulation and regulatory intervention financial inclusion cannot be realised without appropriate financial regulation and regulatory interventions. regulation ensures that the financial system remains stable. only with a stable financial system would it be possible to pursue the financial inclusion agenda. in this regard, the bank of namibia will ensure that appropriate regulations are in place and that we coordinate our regulatory efforts with other regulators, such as namfisa and the competition commission, to safeguard financial stability. financial inclusion requires financial institutions to pursue innovative and alternative business models. innovation is, therefore, central in this process. the bank of namibia pledges its support from the regulatory perspective to encourage innovation. this will be done within the overall regulatory framework to ensure a system of incentives and disincentives that will further financial inclusion objectives, without compromising financial stability. in this connection, the bank is fully aware that over - regulation may stifle the upspring of innovative financial products aimed at closing the financial inclusion gap and we will factor this in our actions. second, consumer literacy and protection our second objective is to ensure consumer literacy and protection. financial illiteracy and lack of consumer protection are major impediments to access financial services. the area of consumer protection ranges from excessive pricing, limited