Markets do respond to need, and competition is a very healthy force for improvement, but market functioning can be impeded by poor infrastructure, uneven regulation, natural or regulatory monopolies, and even cartelization. While enlisting competitive forces wherever possible to compete for the bottom of the pyramid’s business, as a development central bank we also need to offer a supportive hand.
By putting in place the right infrastructure and enabling regulation, we have to encourage the development of the products, institutions, and networks that will foster inclusion. Let us start with products. We have been trying for decades to expand credit. We have focused much less on easing payments and remittances or on expanding remunerative savings vehicles or on providing easy-to-understand insurance against emergencies.