the same time, it has allowed the government to have a complementary role in serving the segments that are under served by the private sector. second, basic banking products and services that are made available at reasonable costs. in february 2005, bank negara malaysia issued a guideline that required all banks to provide such basic banking services. this guideline provided the definition of the features of basic savings and basic current accounts that had to be made available by the commercial banking institutions. this was aimed at ensuring that all segments of society had access to basic deposit and transaction services at a reasonable cost. further, a framework for microfinance was also formulated to enable the provision of micro financing by financial institutions to micro enterprises. micro financing rates are not capped to allow for it to be commensurate with the higher administrative costs involved in providing such services to micro borrowers. this is to allow financial institutions to remain viable and to remain sustainable. third, a diverse set of delivery channels have been introduced to ensure widespread access to financial services. the central bank€™s branching policy has encouraged financial institutions to establish an extensive branch network across the country to ensure widespread physical access to financial services. in 2008, there were 9 bank branches per 1, 000 square kilometres and 24 atms per 1, 000 square kilometres in malaysia. in comparison, the global median is 7 bank branches per 1, 000 square kilometres and 15 atms per 1, 000 square kilometres respectively. financial institutions are also encouraged to apply technology to further enhance the delivery of financial services. the increased usage of internet and mobile banking has also accelerated the migration to electronic payments and has widened the access of financial services in the more remote areas. fourth, is the enhanced financial literacy and consumer protection. with greater financial literacy and awareness, consumers will be protected from being exploited by predatory lending and investment scams, and will be able to make better informed financial decisions. to protect the rights of consumers, a consumer protection framework has been developed to enhance the disclosure standards of financial products and services, the various dispute resolution mechanisms and to institute fair practice amongst the financial service providers. the central bank has also established a one - stop service centre for the public, providing advisory services on financial matters. finally, a credit counselling and debt management agency has been established to provide counselling related to credit and debt management for individuals as well as to inculcate responsible money management habits. fifth, the supporting financial infrastructure to facilitate the operations of financial institutions is an important feature of

zeti akhtar aziz : financial inclusion in malaysia welcoming remarks by dr zeti akhtar aziz, governor of the central bank of malaysia, at the financial inclusion advisers programme, kuala lumpur, 18 january 2010. * * * introduction it is my pleasure to welcome you to the financial inclusion advisers ( fia ) programme. while the global financial landscape is experiencing fundamental changes and as the discussions for financial reforms are being deliberated, of equal importance is the due attention to the financial inclusion agenda. this is vital to achieve balanced sustainable economic growth and broad based job creation. bank negara malaysia is most honoured to host and to jointly organise this financial inclusion advisers programme with the japan international cooperation agency ( jica ). this programme aims to provide practitioners from the financial services industry with a platform to share experiences in the development of successful business models for financial inclusion. it is also an opportunity for regulators to share knowledge and the experience on how to improve the enabling environment for financial inclusion including the institutional arrangements and ensuring its soundness and stability, thereby ensuring its sustainability. challenges in achieving financial inclusion the global financial crisis and the consequent global economic slowdown in 2009 had implications on the financial inclusion agenda. disruptions in the functioning of financial markets has brought the focus of attention on financial stability issues. in addition, the collapse in demand following the financial crisis in the major economies resulted in a contraction in world trade. the synchronized recession which ensued has made it even more urgent not only to ensure that our financial systems are resilient and able to absorb external shocks but that sufficient attention and resources are also available for achieving the financial inclusion agenda. we are now entering a period of improved international economic and financial conditions. however, even in times of economic stability, financial inclusion is a demanding endeavour. firstly, the outreach needs to be comprehensive to include the low income and underserved segments, given that that they are generally geographically dispersed and have low levels of financial literacy. secondly, micro finance institutions need to generate sufficient sustainable returns to cover the high costs involved in providing such services and the lack of potential for economies of scale so as to remain viable. thirdly, such financial institutions also face the challenges of obtaining sustainable and competitive funding. recognising the challenges in addressing these issues to achieve financial inclusion, this programme, which started more than two years ago, is an outcome of a proposal i made at the langkawi commonwealth partnership for technology management ( cptm ) heads of government meeting in 2007, which