Transparency is key if public- private partnerships in the financial sector of any country want to ensure financial inclusion for its people, says a Washington advocacy group.
John Taylor, who is the president of the National Community Reinvestment Coalition, said transpar ency in the way financial institutions approve loans for the poorer groups would be the first step in the `democratisation of access of capital’ .
"The PPP should ensure fiscal fiduciary respons ibility across the board and help anyone who walks into the bank," he said in a talk he presented at the invitation of the Asian Institute of Finance.
Taylor, who is the president of the group, spoke about how the private financial services sector and governments can collaborate to increase the economic opportunities for moderate and lower-in come populations.
Through a public evaluation of the Community Reinvestment Act law for banks, American consumers are able to ascertain if banks are able to meet their obligations.
"The Act creates the obligation for banks to meet the credit needs of the low-income bracket."
While Americans are aware of the free market in which its financial sector exists, the legislation ensures that it abides by the rule of law.
"It also ensures integrity which we lost in mortgages before the crisis."
The US economy was hit by a mortgage crisis in 2007, which subsequently caused panic and global financial turmoil.
The NCRC is an association of more than 600 community-based organisations that promote access to basic banking services, including credit and savings, to create and sustain affordable housing, job development, and vibrant communities for America’s working families.
Taylor was instrumental in helping South African groups develop their HMDA-like law and movement for a Community Reinvestment Act-like legal frame work for citizen empowerment.
In the case of Malaysian banks, he said, an application of a similar legal framework would first require the data of consumer lending.