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2015 microenterprise forum opens in Chile with a call to banks to innovate and expand financial inclusion

SANTIAGO, Chile – Commercial banks in Latin America and the Caribbean should be more closely involved with innovation in order to expand access to formal financial services for the unbanked, said Inter-American Development Bank President Luis Alberto Moreno.

Speaking at the opening of the 2015 Inter-American Forum on Microenterprise (FOROMIC), he noted that only about half the adults in this region have bank accounts, compared with nearly 90 percent of citizens in more developed nations.

“This is why traditional banks cannot remain on the sidelines of innovation,” Moreno said. “Financial inclusion should be seen as a business opportunity, taking a long-term view. That’s why it’s important for banks to share the risks of developing new platforms, rather than letting others experiment.”

Financial inclusion is one of the main topics of this year’s FOROMIC, the biggest conference on microfinance and microenterprise in Latin America and the Caribbean. President Michelle Bachelet, who attended the event’s opening ceremony, said, "We recognize the importance of smaller firms in terms of employment and economic vitality.  I want to stress our strong commitment to working intensely with the privaye sector, especially with small businesses."

FOROMIC is organized annually by the IDB’s Multilateral Investment Fund (MIF). This year the event has drawn 1,300 participants from 45 countries, representing microfinance institutions, commercial banks, credit unions, development agencies, philanthropic foundations and social investment funds.

In his speech Moreno also highlighted how lenders could harness technological innovations such as big data analysis in order to reduce costs. “In the case of the microfinance industry, it means using data available from a variety of sources to analyze clients, instead of more costly traditional methodologies,” he said.

“The question isn’t whether the traditional model of contact banking will change, but rather when will it change,” he added.

During the opening ceremony, Bachelet and Moreno also recognized the winners of this year’s Inter-American Awards for Financial and Entrepreneurial Innovation : Banco Prodem of Bolivia, which won the 2015 Award for Financial Inclusion; Microempresas de Colombia, which won the award for Best Savings Product with a Purpose; and Bicla Diseño, which won the Local Microenterprise Award.

Before the official opening of FOROMIC, the Chilean Ministry of Economy, Development, and Tourism hosted Chile Day, featuring panel discussions on policies and programs that support micro and small entrepreneurs in the country, and on the experiences of Chilean business owners.

In addition, the MIF published the 2015 edition of its annual “Financial Inclusion: Data and Trends” report, based on the most comprehensive database ever compiled of retail financial institutions in Latin America and the Caribbean. The publication combines information on access points, portfolio types (microcredit, housing, consumer, enterprise lending), differing kinds of deposit accounts, and other indicators from over 3,000 banks, cooperatives, other financial institutions, and nongovernmental organizations.

The microenterprise forum, which will continue through October 28, will cover issues such as the power of data for financial inclusion, new technological channels for financial services, opportunities for green microfinance, and promotion of social entrepreneurship.

About the IDB

The Inter-American Development Bank is devoted to improving lives. Established in 1959, the IDB is a leading source oflong-term financing for economic, social and institutional development in Latin America and the Caribbean. The IDB also conducts cutting-edge research and provides policy advice, technical assistance and training to public and private sector clients throughout the region.

About the Multilateral Investment Fund

The Multilateral Investment Fund (MIF), a member of the Inter-American Development Bank (IDB) Group, is funded by 39 donors and supports private sector-led development benefitting low-income populations and the poor - their businesses, their farms, and their households. The aim is to give them the tools to boost their incomes: access to markets and the skills to compete in those markets, access to finance, and access to basic services, including green technology. A core MIF mission is to act as a development laboratory - experimenting, pioneering, and taking risks in order to build and support successful micro and SME business models.

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