yaseen anwar : promoting an inclusive financial sector in pakistan speech by mr yaseen anwar, governor of the state bank of pakistan, at the closure ceremony of term sarmaya certificate ( tfc ) issued by tameer microfinance bank, karachi, 24 january 2013. * * * mr. nadeem hussain, president / ceo of tameer microfinance bank ladies and gentlemen – good afternoon! it is a pleasure for me to witness the successful closure of the first ever term finance certificate ( tfc ) issued by any microfinance bank in pakistan. this is indeed a significant achievement for the microfinance industry and capital markets that has been made possible by collaborative efforts of the diverse stakeholders involved in such a complex transaction. as someone once said : “ coming together is a beginning, staying together is progress, and working together is success. ” therefore, i would like to congratulate tameer microfinance bank, standard chartered bank, igi investment bank, jcr vis, karachi stock exchange, secp, and my colleagues at sbp, for collaborating together to make this tfc issuance a success under the sbp ’ s microfinance credit guarantee facility. i sincerely hope that this first issuance of tfc by tameer bank would open up new funding avenues for microfinance providers and would give further impetus to our efforts in promoting an inclusive financial sector in the country, thereby enhancing the financial sector ’ s stability and viability in the long - run. the importance of financial services in the development of any economy cannot be overemphasized. there is no denial of the fact that access to finance has positive impact on economic growth as it promotes entrepreneurship, generates employment, fosters innovation, reduces poverty levels and enhances social equality. the financial sector in pakistan remains restricted in its outreach both in terms of its depth and breadth. according to the access to finance study of 2008, hardly 12 % of the population has access to formal banking services and another 32 % is informally served whereas 56 % of the adult population is totally excluded. similarly in pakistan, the estimated size of the microfinance market is in the range of 25 – 30 million clients which indicates that the current level of microfinance access at 2. 4 million clients is only 10 % of the potential market. financial inclusion has progressively assumed greater priority in sbp ’ s financial sector development strategy. sbp is pursuing a multi - pronged approach to tackle the challenge of high

a new series of banknotes is currently being introduced. the €50 banknote was issued recently and will be followed by the €100 and €200 banknotes soon. and you ’ re withdrawing the €500 banknote from circulation? exactly. we ’ re no longer printing the €500 banknote because it has become too popular for money laundering purposes and other unsavoury uses. so we ’ re stopping it. a great deal of our time is also occupied by payments, all the techniques used to transfer money from one account to another. just a month ago, we launched a real - time payment system which allows all euro area banks, if they want, to make person - to - person transfers within a matter of seconds. there ’ s a second thing i wanted to ask you. what is qe, or quantitative easing? it ’ s incomprehensible to the general public, but it ’ s a staggering programme : over the past few years, ecb traders – your traders – have purchased €2. 5 trillion in public and private 1 / 8 bis central bankers'speeches debt. the programme has been halted. what purpose did it serve? yes, that ’ s right. over four years, between 2015 and 2018 – our last net purchases were made a few days ago, just before christmas – we bought european public and private debt amounting to €2. 6 trillion. why? it ’ s very simple : to reduce the cost of financing in the euro area. the central banks – they teach this in high school – steer the overnight interest rate. but, this is not sufficient as firms borrow over a period of three, five, ten years. so the three - year, five - year and ten - year interest rates also need to be lowered. to do this, we buy government bonds, and this has considerably improved financing conditions, which, in turn, boosts consumption and investment in the euro area. €2. 5 trillion, mr cœure – you say this has given a boost to consumption and investment. but ultimately if we look at growth, all this money quite frankly doesn ’ t seem – at least to people in france – to have gone to them, into their pockets, into a rebounding economy... of course it ’ s gone to them! through all the mechanisms that make the economy work : lowering interest rates for lending to companies, which we did not only in france and germany, but also in greece,