According to the world bank, Financial inclusion means that individuals and businesses have access to useful and affordable financial products and services that meet their needs – transactions, payments, savings, credit and insurance – delivered in a responsible and sustainable way.
In this podcast we explore the current status of financially inclusion, why it is a global economic objective and some of the reasons why people remain excluded.
Three key takeaways:
- Globally there are 1.7 billion unbanked adults, 56% of which, about 980 million are women according to the most recent Global Findex data. In developing economies women are 20% less likely than men to have an account at a formal financial institution and 17% less likely to have borrowed formally in the past year
- Financial Inclusion is a means to tackle poverty and inequality and is vital for inclusive economic growth. It underpins and contributes to many of the Sustainable Development Goals (SDGs)
- Challenges to addressing the unbanked are that they are high risk as they have no history of credit, can lack identity documents and have an informal and fluctuating income. But M-PESA in Kenya is an example that shows it is possible to profitably provide services to this segment.