12/11/2013 World Business Report

come together to help those who are suffering. Now, World Business

Report. Banking for those who need it most.

We find out how the World Bank hopes to give all working age adults

across the world access to bank accounts and credit. As the world

waits for answers on China's economic future, we highlight how

rapid urbanisation could create a housing bubble in the world's

second`largest economy. Preparing for a cyber attack. The city of

London finds out just how vulnerable it is. First, 2.5 billion adults do

not have access to the financial system. That means they have no bank

accounts, no credit and no insurance, and effectively, no

financial security. The World Bank wants to change that. It says it

wants to provide financial access to all working age adults by 2020. As

you can imagine, there are various challenges ahead. Innovation in

microcredit and mobile technology is managing to change lives around the

world. In Kenya, an idea that was born five years ago is changing the

way people send money around the world. It is based on the mobile

phone. There are more than 1700 registered users. Bank accounts are

being integrated into the system so that users can deposit and withdraw

money and even take out loans and make interest on their money. Users

can pay for goods and services like rent, electricity, water bills or

even just buying lunch. In Bangladesh, microcredit lending has

led the way in getting poorer people access to finance. Nearly 30 years

later, a long list of providers lent billions of dollars to as many as 20

million small borrowers. While debate remains ever however

effective microcredit has been, it has definitely given people in

Bangladesh access to finance. Recently, Bangladeshis have been

interested in mobile financial services as well, such as mobile

wallets. Colombia still has a lot to do to improve access to financial

services but last year, 3.8 million people benefited from microcredit

loans. That is more than one out of every ten adults in Colombia. I

recently met somebody who embodies what micro` financing can do and is

doing for poor people in Colombia. He has been selling avocados on the

streets of Bogota for more than 20 years. 80 years ago, he got his

first micro` loan. It was just $300 `` eight years ago. It paved the way

for the mortgage that allowed him to buy his first home. Thank you for

joining us. You are the senior economist from the World Bank. We

have just received a sense of where some countries in the world are on

this issue and also how important innovation is when it comes to

achieving this goal. How are you planning to make this happen?

Connecting 2.5 billion people financially by 2020 is no mean feat.

That is correct. There are many driving forces behind financial

inclusion. And those were three great examples in Kenya, Bangladesh

and Colombia. There is a lot of innovation. There is the potential

for using the almost 7 billion mobile phone subscriptions around

the world. It is almost in parity with the world's population.

However, that is only one of many ways we can work towards achieving

that. It will definitely take partnerships between public and

credit. The legal and regular trade frameworks will have to be

strengthened. And also taking advantage of different kinds of

programmes that exist out there like government to pass on payments in

many developing countries. They don't necessarily make use of

payment mechanisms that would enable people to get to the bank. There are

many different policy, innovation, product, design, technology aspects

that we are looking forward to moving on aggressively over the next

few years. As far as you are concerned, what are the obstacles to

achieving that goal? We have looked at countries that are seeing

innovation but there are many places in the world where it is extremely

difficult to get a financial connection. That is correct. As we

move forward, one of the challenges is definitely the enabling

environment. Some countries have strong institutional frameworks and

legal and regulatory systems. Too often as countries are in the

process of developing, those institutions are not where they need

to be. Something you mentioned in the context of Colombia that I

worked on quite a bit for a number of years is a credit reporting and

good information infrastructure so that you can determine are in the

system. Another thing that I would like to highlight is that much of

the report in the beginning was about microcredit. We want to go

beyond the credit side of microcredit to a more expansive

definition of financial inclusion that includes payments and savings

and insurance policies and other risk mitigation services as well as

credit. Thank you. We appreciate your time.

A very interesting subject that we will of course return to as it

develops. Now, let's talk about China. The meeting of leaders which

will set the course of the country's economic future is drawing

to a close today. And the world will be watching, which is not surprising

when you consider how much of the world's growth is driven by this

giant economy. The outcome is of extreme interest to the local

population in China as well, especially when it comes to issues

of rapid urbanisation and investment opportunities. There are fears a

housing bubble could develop, leaving many Chinese people exposed.

Real estate is the saviour and the curse of the Chinese economy.

Apartment blocks like these are coming up across the country. This

year alone, construction began on 1.5 Union Square metres of new

housing. Perfect for the new affluent population of China. Home

ownership rates here are 90%. But looking inside some of those

gleaming high`rise buildings, the surprise is that there is no one

there. Families are buying up second, third, even fourth home is

purely as investments. Property is one of the few places Chinese people

can put their money and get an amazing return. This is a new type

of asset in which, actually, use is a negative thing. You are not

supposed to live in these apartments because that would depreciate the

value of them. They collect them the way one would collect a wristwatch

or gold coins in ages past. Chinese cities are still growing and not

everyone can afford the rising prices. The government has promised

to build new affordable housing but it also needs the property industry

to sustain the economy. If this bubble burst, ordinary families

could lose everything. London's financial community will undertake a

simulated cyber attack today to gauge how vulnerable the city is to

an assault on computer systems. Ranks, financial institutions, the

Bank of England, the Treasury and the Financial Conduct Authority are

all taking part in this inhalation. The exercise, which is being called

Waking Shark, follows a similar exercise which was held in New York

earlier this year. The Venezuelan government has occupied a chain of

electronic stores, forcing them to cut their prices. President Nicolas

Maduro drafted in the Army to make sure the train of stores brings

their prices down to what he calls fare levels and also to keep crowds

of bargain hunters at bay. He occupied the stores in a bid to

tackle high inflation which he blames on price`fixing. A number of

store managers have been arrested. Financial markets. Japan is proving

to be very strong indeed. Industrial and Commercial Bank of China has

been added to a list of global banks that need more capital. That is an

interesting story, the talk of the markets today.

Young people in care are not getting the support they are legally

entitled to, according to a group of MPs. A report found that many who

leave care are missing out on financial support from their