How do financial services impact the lives of poor people? Though the global development community has debated this question for decades, we seem to be no closer to an answer today than we were when we started. A growing number of rigorous studies meant to clarify the impact debate have instead produced mixed — seemingly contradictory — evidence. This has resulted in both advocates and critics citing rigorous evidence when arguing for or against the prioritization of financial inclusion in the global development agenda. While several narratives have emerged over the years to describe the role of financial services in poor people’s lives, their over-simplifications prevent us from making sense of the mixed results observed across impact studies. What is clear is that the financial inclusion community needs a more nuanced, evidence-based impact narrative to make holistic sense of existing research and help shape more effective financial inclusion policies.
CGAP believes that it is time to move beyond the existing narratives supported by some and critiqued by others. Based on an analysis of the growing body of evidence and multi-stakeholder consultations, CGAP has developed a theory of change (TOC) to guide the financial inclusion community toward an updated narrative that shows the many ways financial services can impact the lives of poor people.