During the Global Policy Forum in Kuala Lumpur last year, the 121 members of AFI have adopted the Sasana Accord to set quantifiable and measurable financial inclusion indicators as national targets. It is also encouraging to know that 28 OIC members have direct membership in AFI, while 4 others are indirectly affiliated through regional central banks. Further, financial inclusion solutions typically involve cross-disciplinary collaboration. Policymakers could consider a national coordination mechanism, for example, in the case of Tanzania and Mexico to effectively identify policy priorities and allocate the right resources in implementing the policies. Third, data and technology are key enablers of innovative policy solutions Robust data collection and gap analysis help policymakers to connect with realities on the ground and identify real needs for intervention. Data also facilitates monitoring and impact assessment to determine if a particular policy is achieving its intended outcome. Technology plays a critical role as it provides low cost, scalable channels to deliver financial inclusion solutions. It is particularly effective in overcoming geographical barriers to financial inclusion. The Malaysia’s experience in agent banking shows how data and technology enable innovative policy solutions. It also helps to make an informed decision on resource allocation. In 2011, the Bank conducted the Financial Inclusion Demand Side Survey to complement supply side data collected from financial institutions. Data highlighted that there was a lack in the provision of access points, as only 46% of 837 sub-districts with a population of more than 2,000 have at least one financial access point.
Muhammad bin Ibrahim: Malaysia’s experience in macroprudential policies and insights on financial inclusion Remarks by Mr Muhammad bin Ibrahim, Deputy Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the Meeting of Central Bank and Monetary Authorities of the Organisation of Islamic Cooperation Member Countries, Surabaya, Indonesia, 6 November 2014. *  *  *  Allow me to share the five broad principles which the design, deployment and calibration of macroprudential policies in Malaysia are premised upon: First, macroprudential policies introduced must be complementary to other microprudential, monetary and fiscal policies I will share on the measures we implemented since November 2010, where we introduced a series of macroprudential policies in concert with a package of monetary, fiscal, regulatory, supervisory and long-term structural measures (e.g. enhancing housing supply) to curb the excessive credit-fuelled speculation in the Malaysian housing market and to reign in the increasing level of household indebtedness. This required coordination with other part of the government. There was one particular measure that we introduced in November 2010, called a loan-tovalue (LTV) ratio where a maximum limit of 70% was imposed on the third and above outstanding house financing per individual. A cap of 10 years on the tenure of financing for personal use and 35 years on the tenure of house financing were also introduced in July 2013 together with gradual implementation of real property gain tax, consumer education and debt management measures.