Financial health is an emerging topic of research, advocacy and practice that aims to understand, measure and ultimately improve the part of wellbeing that is associated with the financial life of individuals. Financial health is a comprehensive approach, and this makes it an effective tool to address the Sustainable development Goals (SDGs). Poverty reduction (SDG 1) is a key objective that motivates government and private sector financing for financial inclusion interventions globally. Easier or more affordable access to loans that support the income growth or diversification can enable people to overcome poverty. However, to ensure a sustainable impact, the broader lens of financial health is needed because it focuses on preparedness and building resilience as well as the big picture, such as long-term financial goals.
This white paper aims to create a baseline from various discussions on financial health and builds an evidence base from the work done by institutions and individuals globally. The paper explores the constituents and drivers of financial health, how to measure it and the role of various stakeholders. It also serves as an effort towards a common and shared understanding on the subject, while aiming to build a coalition of public, government, and private sector actors who could be willing partners in collective learning and action towards enhancing financial health globally.