barry whiteside : extending financial services outreach to the next level opening speech by mr barry whiteside, acting governor of the reserve bank of fiji, at the national microfinance workshop on extending financial services outreach to the next level, suva, 4 march 2011. * * * distinguished guests, ladies and gentlemen. introductory remarks good morning and bula vinaka to you all. thank you for kindly accepting our invitation to participate in this one day workshop where we will be deliberating on how to take financial services outreach to the next level. when we first met and deliberated on the whole financial services outreach topic in november 2009, we had set ourselves medium term strategies to drive financial inclusion and microfinance in our country. a governing committee, the national financial inclusion task force ( nfit ), initially chaired by the former governor, mr. sada reddy, was formed to monitor the overall implementation and progress of financial inclusion in fiji. three working groups : financial literacy ; statistics, and microfinance, each comprising key stakeholder representatives, were set up to implement the strategy and action plans which came out of the first workshop. i am delighted to say, fourteen months on, that we can clearly witness the good progress in financial inclusion and microfinance efforts across fiji. this is no doubt due to the passion and efforts of many of you here today. the clear challenge for us is not to lose that passion and to keep the momentum going. i wish to extend my sincere thanks to the government, donors, civil societies and the private sector for their respective contributions in the development of microfinance and financial inclusion. in particular i wish to thank commercial banks and the mobile phone network operators for actively taking lead roles in spearheading initiatives that we now see taking shape across our economy today. let me also acknowledge the on - going support of the pacific financial inclusion programme ( pfip ) who were there from the word go when we first started this partnership in november 2009 and again, now, as co - host for this second microfinance workshop. progress of microfinance in fiji as we all know, microfinance has been recognized in many developing countries around the world as a means to alleviate poverty and generate employment. microfinance contributes to the empowerment of individuals, the development of communities and of the economy. it is for this reason that we have all become so passionate about financial inclusion and microfinance. we clearly realize the benefits these bring to the welfare of

in robust credit activity. in this context let me say that the process of financial deepening, which is taking place in almost all countries that joined the eu in 2004 and 2007 will also support economic development as it is expected to promote more efficient investment. however, this process does require careful monitoring and strong prudential supervision, in particular if financial deepening takes place at a very rapid pace. another element of slovenia ’ s successful convergence experience is its participation in the exchange rate mechanism ii ( erm ii ). slovenia ’ s participation in the mechanism has been smooth. the parity at which slovenia entered the erm ii was set at the market rate at the time of erm ii entry and the tolareuro exchange rate remained very close to the parity for the entire period of erm ii participation. as a consequence, the eu council decided that the central parity should also become the final conversion rate of the tolar to the euro. let me use this opportunity to stress again that participation in erm ii is a very important step on the road to the euro. a smooth participation in erm ii is testimony for the sustainability of the necessary convergence process prior the adoption of the euro. erm ii participation ties the exchange rate and hence acts as a “ testing phase ” of the irrevocably exchange rate fixation. in this respect, the mechanism provides flexibility with a 15 % band around the parity and the possibility of mutually agreed realignments of the parity. let me also recall that while two years of participation are the minimum period required, there are no limits on the maximum length of the participation. this in turn allows countries which have not yet achieved a sufficient level of sustainable convergence with regard to all criteria to adequately prepare for the single currency while already enjoying the benefits of a stable exchange rate anchor. let me at this point also mention that currently there are seven countries participating in the erm ii ( denmark since 1979 [ erm i ], estonia and lithuania that joined erm ii in 2004, cyprus, malta, latvia and slovakia that joined in 2005 ). for these countries, the erm ii experience has been and remains a useful test to check whether their economies can work smoothly under conditions of stable exchange rates or whether further efforts are needed to make the convergence process sustainable. finally, let me say that the ecb has established excellent working relations with banka slovenije over the last couple of years. already prior to eu accession,