jwala rambarran : financial inclusion in the caribbean opening remarks by mr jwala rambarran, governor of the central bank of trinidad and tobago, at the caribbean conference on financial inclusion “ from agenda to action ”, port of spain, 28 august 2012. * * * ladies and gentlemen, i thank the commonwealth secretariat for the invitation to speak at this important caribbean conference on financial inclusion, an issue that has jumped quite quickly to the front burner for policymakers and financial regulators, and which is now integral to the g - 20 international economic agenda. indeed, the growing priority placed on unlocking the economic and social potential of the “ unbanked ” is illustrated in the fact that more than 60 countries have implemented financial inclusion reforms in recent years. in addition, financial regulators from over 25 developing and emerging market countries have endorsed the 2011 maya declaration on financial inclusion, the first global and measurable set of commitments to foster greater financial inclusion. more governments are expected to endorse the maya declaration over the coming year. i believe that a convenient starting point for my remarks is to first clarify what we mean by the term “ financial inclusion ” since there is no universally accepted definition of financial inclusion. some definitions imply that all persons should have access to financial services ; others define a vulnerable group, usually with lower income or the poor, as the target of inclusion. a definition that i consider appropriate for the purpose of policy is the one used by the world bank. “ financial inclusion refers to efforts to expand public access to and usage of tailored financial services ”. by this definition, the scale of the financial inclusion challenge is daunting. almost half of the world ’ s adults – an estimated 2. 5 billion people – lack access to basic financial services. imagine what it would be like if you had no access to banking services or credit ; if you did not understand how mortgages or credit cards work, or if you had no way to save some of your earnings to invest in your education or to start a business. imagine if you were cut off from opportunities to improve your economic well - being against illness, accidents, theft and unemployment, and, over time, to escape poverty. this, ladies and gentlemen, is the case of those who endure financial exclusion. sadly, the global economic crisis, which is now in its fifth year, has worsened the plight of those who face financial exclusion, preventing even more of the world ’ s poor from gaining a foothold on an important ladder out

of poverty. in my remarks this morning, i will first share my perspective on why financial inclusion matters to our economic development in the caribbean. second, i will briefly describe the efforts of the central bank of trinidad and tobago to promote financial inclusion, focusing on the office of the financial services ombudsman, which is the only such ombudsman office in the caribbean, and on the national financial literacy program, which is another pioneering initiative in the caribbean that has received strong support from the commonwealth secretariat. i will end with some key messages for moving financial inclusion issues from agenda to action. bis central bankers ’ speeches financial inclusion in the caribbean ladies and gentlemen, for most people, having an account at a financial institution not only serves as an entry point into the formal financial sector, but also meets their core financial needs. for some time, rigorous, objective and reliable indicators of how people save, borrow, make payments, and manage risk had been lacking for most countries. in april 2012, the world bank ’ s development research group released the global findex database, which provides some systematic indicators of financial inclusion in almost 150 countries. unfortunately, the global findex covers only 2 countries in the caribbean – haiti and trinidad and tobago. it is, therefore, very difficult to know about the overall reach of the caribbean financial sector – the extent of financial inclusion and the degree to which such groups as the poor, women and youth are excluded from the region ’ s formal financial systems. so, i will use the available data that covers what is considered a relatively highincome country ( trinidad and tobago ) and a low - income country ( haiti ) to give some sense of the financial inclusion gap across caribbean countries. while about half of all adults around the world have an account with a formal financial institution – a bank, credit union, cooperative, post office or micro finance institution – within the caribbean the limited data suggest a large variation in account penetration. in trinidad and tobago, more than 75 percent of adults report having an account at a formal financial institution. on the other hand, in haiti, almost 80 percent of adults are “ unbanked ” ( that is, they do not have an account at a formal financial institution ). not surprisingly, the gap between both countries is very wide from an income distribution perspective. in trinidad and tobago, adults in the richest income quintile are as likely as those in the lowest income quintile to have an account at a formal financial institution. in