UPU News:-Financial inclusion: Posts must be part of development agenda, experts say

Pushing for Posts to contribute to the United Nations’ post-2015 development plans, UPU Director General Bishar A. Hussein stressed how the postal sector’s strengths can help bring an estimated 2.7 billion unbanked people into the financial fold.

"Poverty eradication and financial inclusion are intertwined themes that occupy a central place in the UN’s current Millennium Development Goals. They will continue to dominate the post-2015 agenda on international migration and development,” he said at a global forum on financial inclusion for development, which opened today in Geneva. The two-day forum is organized by the UPU, the Swiss government and the International Organization for La Francophonie.

Hussein highlighted the role of Posts in providing financial services to impoverished or rural people excluded from other financial institutions. Today, over one billion people hold 1.6 billion postal accounts, but there is far greater potential for Posts to ease financial inclusion.

The UPU also unveiled a joint study with the World Bank, which showed that society’s most vulnerable people are more likely to get financial services from a post office than any other institution.

“Financial inclusion may have caught the world's attention only in the last decade, but it has been the UPU’s preoccupation for the past 140 years,” recalled Hussein.

Remittances take the spotlight

With more than 230 million migrants globally – half of which are economically active, according to the International Labour Organization – panellists agreed that cutting the cost of sending remittances would aid the developing world.

According to the United Nations Conference on Trade and Development, remittances account for 0.8% of global gross domestic product.

“We need to recognize what a wealth we have in our migrant community, both in terms of social and monetary capital,” said William Lacy Swing, director general of the International Organization for Migration.

Stéphane Gallet, from France’s ministry of foreign affairs, said the cost of remittances is often more expensive when they are sent to rural areas than cities. Given their wide reach in rural areas without bank branches or money order services, “Posts play a large role in reducing cost in the last kilometer of delivery,” he said.

But an efficient domestic payment system infrastructure is key to reducing remittance costs, especially in receiving countries, said Marc Hollanders, special adviser on financial infrastructure with the Bank for International Settlements. He agreed that Posts’ far-reaching networks must not be overlooked.

“Posts have many strengths and can contribute as much as any other financial institution in ensuring quality of service and reducing the cost of remittances, but most important is their huge network, particularly in emerging markets,” he said.

“We are trying to be a solution to the cost,” said UPU Deputy Director General Pascal Clivaz, who noted that the UPU’s projects to modernize the payment networks of African postal operators have decreased remittance tariffs by between 30 and 50 per cent in some cases.

Close to 200 people are taking part in the forum, attended by representatives of Posts, governments, UN and non-governmental organizations, donors and other financial inclusion experts.