It was my great pleasure to be asked to contribute to this seminar, which is kicking off the Saudi G20 presidency’s work on financial inclusion on 22 January 2020, in Ryad. The purpose of the seminar is to bring together experts, policymakers, scholars, businesses and more to share insights, as the presidency dives into producing high level calls to action for governments to help move along digital inclusion for these key groups.
The seminar started with a session of businesses and policymakers on how to harness digital innovation in general, and then proceeded with sessions on digital inclusion for youth, women and, last but certainly not least, SMEs. I say last but not least because it became clear, as the meeting progressed, that the reason we need to focus on digital financial inclusion for these groups is because of finance’s role in promoting economic opportunity, primarily through entrepreneurship.
I had the honor of moderating the final panel on digital inclusion for SMEs, during which I was ably aided by my panelists Nejoud al Mulaik, CEO of Saudi Fintech, Mansour Davarian, Head of Platform Sales for Demica, Mohammed al-Khowaiter, Head of Credit for SME Finance Forum member Kafalah Financing Guarantee Program of Saudi Arabia, and Nick Lee, Head of Regulatory Affairs for OakNorth . They were great panelists, and the audience was also incredibly engaged, peppering us with dozens of digital questions during the session.
The panel was both a good news and a bad news story…good news because, as noted above, SMEs and entrepreneurship clearly are critical targets for digital inclusion - this is why the G20, as it narrows its financial inclusion focus in coming years, will retain SMEs as one of only two priorities in this narrowed agenda). But it’s also bad news, as SMEs have always been a problem child for financiers, … the main challenge being having the right information, at the right time, to manage the risks of financing.
Our panelists, each from experience, noted how digitalization, focused on both payments and commerce, holds the key to scaling up access… the more SMEs can be helped to move from cash to digital payments, and from paper to digital contracts/invoices/etc, the more the barriers to providing responsible, affordable financing will come down. They also discussed how the G20 and governments everywhere can play a key role in encouraging SMEs across this transition, through supporting the basic digital infrastructure and responsible data governance that supports digitalization.
All in all, a very energizing start to a G20 presidency in which SME financial inclusion is deservedly receiving high priority. Thanks to the Saudi G20 Secretariat, particularly our colleagues from the Saudi Arabian Monetary Authority (SAMA), for putting on this seminar. I very much look forward to the longer GPFI Forum, which will take place this coming June in Jeddah!