Photo Courtesy of DailyFinTech
By FAITH TURNBULL, The Guardian
Who really benefits from microfinancing?
Today, during the Economic and Finance committee (ECOFIN), countries staked their claims in the presented working papers. There are various blocks that presented themselves during the first moderated caucus including blocks which support the different working papers: “ATMS,” “3 Cs,” and “Helping Hands.” Among these working papers, there is already a growing divide between larger, more developed, countries and the smaller and less developed countries.
Many countries in Latin America and Africa are supporting “ATMS” and its four pillars of financial policy: Access, Technology, Monitoring, and Sandboxing. A representative from Argentina defined these four pillars as critical to developing countries as they move to stabilize their economies and finance.
Specifically, their policies surrounding sandboxing are important to more underdeveloped countries. Argentina explained, “When you’re looking at micro financing institutions, which are institutions that are giving money to countries or to developing nations, a lot of times, the money they are giving or the way they are giving it is not well suited to the nations themselves, so it ends up being more exploitative than helpful.” Thus, [Argentina explained,] the pillar in “ATMS” will “allow the government to observe the activities of the micro financing institutions for a couple of weeks or months to see if they are a good fit for their nation.”
Argentina also wanted to ensure there is a focus on the technology part of the “ATMS” position. The short-term goal is to provide the people of less developed countries to technology. That way, when cryptocurrencies are implemented in the long-term, everyone can have access to their finances that way. They want to do this “especially in rural areas… because if we implement mobile money and half the population doesn’t have the technology to use it, it doesn’t make any sense.”
Larger countries, such as Canada, Japan, France, Romania, and others, are behind the “3Cs” working paper. This paper emphasizes the importance of individual countries, their communities, and their corporations. Financially, these three emphases will help developing nations achieve financial stability in ways that are unique to their cultural and economic climate.
Canada highlighted the importance of the interlinked nature of these three focuses while also spotlighting the distinction between communities versus countries and companies. As a delegation, they are more concerned with individual communities within the country. This is because of the other incentives that the country or companies may have.
Along with the focus on the communities, the “3Cs” is committed to creating interlanguaged banks and financial places. They want to ensure that the indigenous language is used in combination with other major languages used in the area to make sure that financial knowledge and security are accessible to everyone in the communities, regardless of their native language. This exemplifies a commitment to accessibility to finances because of their charge to eliminate language barriers. The commitment of the “3Cs” to create accessible finances is also emanate through their focus on women’s rights and access to financial and economic security.
During committee today, it was evident that the focus of many countries is to create financial stability in less developed countries. Whether that is through a plan by these smaller countries or by larger countries that want to step in to help, is unclear. Looking forward in this committee, it will be important to note how cryptocurrencies are handled as well as the treatment of the indigenous people of these lands.