shamshad akhtar : financial inclusion keynote address by dr shamshad akhtar, governor of the state bank of pakistan, at the expanding access to finance usaid and shorebank international wham project 2005 - 08, islamabad, 28 march 2008. * * * 1. asia is home to nearly 650 million of poor ( defined as 1 dollar a day 1 ) representing 65 % world poor. population growth and economic cyclical factors however add annually to the ranks of poor. notwithstanding there has been a reduction in poverty incidence in asia from 27 % in 1990 to 20 % by 2006, though east asia managed to achieve steeper and swifter reduction in poverty relative to south asia. 2 east asia lifted around 630 million people from extreme poverty in under a quarter of a century and the region ’ s share in total poverty declined from 58 % in 1981 to just 9 % in 2004. in south asia poverty fell from 52 % in 1981 to 32 % in 2004, but absolute number of poor has been high close to 470 million. along with poverty reduction, there has been a gradual move to attainment of millennium development goals ( mdgs ). 2. several factors have contributed to improvements in these indicators ranging from higher economic growth and liberalization to concrete affirmative and targeted anti - poverty programs. among these, global microfinance campaign and domestic initiatives helped in changing lives of poor and extended them finance that contributed to their economic empowerment. in asia, the number of microfinance beneficiaries has now reached 113 million : 74 % of who were poor and 65 % women. including families of the beneficiary clients, microfinance services reached close to 465 million across the world – almost 85 % of these are asian clients. dealing with “ poverty ” is complex given its dimensions and multiple causative factors. global and regional challenges of reducing poverty and mdgs are daunting but attainable provided there is accelerated, aggressive, brutal and frontal attack through well coordinated and cohesive economic and social policies. 3. recognizing this dilemma, the evolution of financial inclusion that aims to broaden and deepen access to development finance for all, of which microfinance is a subset, is timely. ultimately it is a well functioning and efficient financial market which can deal holistically with provision of financial services to the economy and population. building financial inclusive system is, however, an integral and core pillar of financial sector reforms. as growth and development of finance alone does not address

, growth rates acceleration will be conditioned by the resurgence of the private sector. in this regard, the bank of albania deems that the economic climate provides the conditions and space for even higher consumption and private investment growth. despite positive growth rates, the albanian economy is expected to remain and operate below its potential, with the demand conditioning the continuation of the negative output gap and contained inflationary pressures. on the other hand, inflation performance will continue to be under foreign prices pressure for the upcoming period as well. in the absence of unexpected developments, the effect of shock from foreign prices is expected to fade away while the effect of administered prices increase is expected to be neutralised during the third quarter of the year. therefore, inflation is foreseen to return within the bank of albania target band by the year - end. although risks about this base scenario are added as a consequence of uncertainties of the global economy, they remain balanced. * * * drawing on the information above, the supervisory council of the bank of albania deemed that inflationary pressures are, in the short term, high, but with a downward trajectory ; in the medium term they remain controlled. in the absence of unexpected shocks, inflation is expected to be within the target band of the bank of albania along the time horizon of monetary policy action. inflationary expectations of economic agents continue to be within the target range, which is essential under the conditions of the simultaneous presence of the negative output gap and high foreign prices. the bank of albania is fully committed for anchored inflationary expectations in compliance with its inflation target and stands ready to accomplish its mandate, by preventing materialisation of constant pressures on inflation. following discussions, the supervisory council concluded that the monetary conditions remain appropriate for meeting the medium - term inflation target and decided to leave the key interest rate unchanged at 5. 25 %. bis central bankers ’ speeches