Financial inclusiveness in NE to see high growth rates

Ramani Kangaraarachchi

Financial inclusiveness is vital to create sustainable inclusive economic growth, Central Bank Governor Ajith Nivard Cabraal said.

He said financial inclusiveness is where people of working age have access to a variety of quality financial services at affordable prices, in a convenient manner with dignity.

Speaking on promoting financial inclusiveness in the North and East at the Central Bank on Friday, he said the government has taken huge measures to promote financial inclusiveness in the North and East during the past 2 years.

He expects the range of investments made in these provinces will result in a growth rate of 13 percent per annum from 2011 onwards for the next five years.

The Governor said, “sustainable financial strategies should encompass improving the range, quality and availability of financial services to the underserved and financially excluded.

“Because it is increasingly being seen as important to the goal of poverty reduction and the achievement of the MDGs,” Cabraal said that financial exclusion can be a serious recurring problem in a vicious circle.

Because the absence of access to basic financial services such as an savings account leads to lack of savings, low investment and lack of financial planning and seeking government social protection as they near retirement age.

“The lack of access to credit leads to the prevalence of informal sources of finance where interest rates are exorbitantly high ,resulting in people being condemned to a life of poverty where they can neither save nor invest.

“Financial exclusion can therefore effectively widen the ‘rich-poor divide’ and cause social exclusion,” he said.

Referring to the importance of financial inclusiveness in the North and East in the country he said it would help government efforts to promote regionally balanced growth and development.

It will also increase economic activities and create employment opportunities in the North and East quickly.

The government can distribute financial resources in a fair manner further promoting savings and investment and ensure high sustained and inclusive growth.