Secretary Clinton's Remarks at the "Inclusive Finance: A Path to the MDGs" Luncheon

Posted by DipNote Bloggers
September 22, 2010

Secretary Clinton spoke today in New York at a luncheon meeting on "Inclusive Finance: A Path to the MDGs."

The Secretary said, "...I see in my travels across the world that talent is universal, but opportunity is not. And we are here at this very important event to highlight one of the biggest obstacles to making the most of everyone's talents and their hard work; namely, a financial system that leaves out some 3 billion people, many of them women, rural farmers, small business owners, people with disabilities, ethnic minorities. Most of us in the developed world take the financial system for granted, whether it's easy access to credit or a safe place to deposit our money. But without a bank account, parents can't save for a child's education. Without loans, small farmers can't buy fertilizer for the start of the growing season, and entrepreneurs can't expand and grow their businesses. And when people cannot participate in the formal economy, they often are taken advantage of, they are often left without recourse, and the effects of that undermine their own ambitions and hopes for families, communities, and even countries.

"...Now, we in the Obama Administration have made financial inclusion a priority. Last year, President Obama announced a new Microfinance Growth Fund, which has committed more than $100 million to provide credit to individuals and small businesses, especially those run by women. Beyond that, we are encouraging partnerships to open up new opportunities for mobile banking. We are supporting innovations like secured-transaction reform, so that small businesses can use movable assets, like the tailor his sewing machine, or the farmer her tractor, as collateral for loans -- something that is not permitted by a lot of formal banks throughout this hemisphere and elsewhere. We are also supporting consumer-protection efforts, so that we can protect the newly banked from becoming victims of predatory lending practices.

"The initiative that we are launching today is called BRIDGE, which stands for Building Remittance Investment for Development, Growth, and Entrepreneurship. BRIDGE is a partner between our development agency, USAID, our U.S. Overseas Private Investment Corporation, OPIC, and the Inter-American Development Bank. It demonstrates one of the benefits of actually bringing more people into the financial system. And it reflects the vision of President Lobo and President Funes of their countries and governments. In partnering with us on BRIDGE today, both leaders in Honduras and El Salvador have shown a commitment to advancing financial inclusion.

"And here's how it works. Every year, millions -- actually, tens of millions -- of people around the world leave home to find work. They settle in countries where they think they have a better economic future, then they begin sending money back home. And they send it to their families for all kinds of purposes. Now, if they send these remittances through the formal financial system, they create huge funding flows that are orders of magnitude larger than any development assistance we can dream of. By harnessing the potential of remittances, BRIDGE will make it easier for communities in El Salvador and Honduras to get the financing they need to build roads and bridges, for example, to support entrepreneurs, to make loans, to bring more people into the financial system."

You can read a transcript of the Secretary's remarks here.


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