• Magdalena Gołębiewska

Calling for financial inclusion and proving that it works!

World Bank's Global Findex research shows that almost half of the total global adult population has no access to formal financial services (bank accounts, credits, loans, payments etc...). Despite progress in boosting retail banking, insurance, stock markets, microfinance, and informal financial services, billions of people remain outside the reach of formal financial systems.

We are making progress, especially with disruptive FinTechs as well blockchain technology, however, it is NOT ENOUGH. We need scalable technology and significant improvements.

Bringing people into the formal financial sector would NOT ONLY improve their lives, but it would also contribute to the soundness of financial systems themselves. The global financial crisis shed light on the fragility of financial systems and the important links among financial inclusion, stability, integrity, and financial consumer protection.


Now, the world is more connected than ever. Thanks to the internet, we can help emerging economies and onboard people to financial system or... as I always repeat, maybe build a new, better one. It doesn't matter how exactly we will do that, probably, as always, step by step, with a lot of mistakes on the way. The most important here is that 2 BILLION people have no access to financial system, even worse, no access to financial education. That is why calling whole industry to do whatever it takes to promote inclusiveness in financial sectors to ensure services are available to all individuals, including low-income people.


Giving people access to savings accounts, loans, insurance and other financial services is as important as giving them clean water and place to live. Yes, you are reading that right.

Worth to check the series, along with a recent paper, “Achieving the Sustainable Development Goals: The Role of Financial Inclusion,” which highlights the link between financial inclusion and development.


Assumption 1:

People who can access financial services have greater security and privacy over their money. Savings accounts make it easier to save, so people save more and earn more.

Proof points:

  1. Women in Nepal who were offered a simple bank account increased their total assets by 16%.

  2. In India, a government effort to open banks in rural areas helped cut rural poverty by up to 17 percentage points.


Assumption 2:

Increasing account ownership also would promote gender equality. Consider that poor women account for 1.1 billion of unbanked adults, or most of the financially excluded.

Proof point:

  1. When savings accounts were offered to female market vendors in Kenya, their daily expenditure increased by 37%, relative to a comparable group of women who did not receive an account.

Assumption 3:

Financial inclusion of farmers can unleash bigger investments in the planting season. The result: higher yields—and progress toward greater food security.

Proof point:

  • When Malawian farmers had their earnings deposited into a new bank account, they spent 13% more on equipment and..

  • ...increased the value of their crop output by 21%.

Assumption 4:

Financial inclusion also can encourage good health. A savings account allows parents to pay for a clinic appointment for kids. Out-of-pocket health care costs are an important reason why people are stuck in poverty.


Proof points:

  • A study in Kenya found that giving people a safe place to store money increased health spending by 66%.

  • Emerging research in Jordan suggests insurance can help women defray treatment costs and manage health-related shocks that would otherwise disrupt their economic activities and result in lost income

That is not the end..

Assumption 5:

Digital financial payment products – a mobile phone linked to a bank account – allow people to get money from far-flung relatives and friends in a crisis, reducing the odds they’ll fall into poverty.

Proof point:

Assumption 6:

There’s growing evidence that digitising payments — for health, education or other social safety nets – yields big benefits for individuals, in addition to improving efficiency for governments and aid agencies by reducing transaction costs and leakage.

Proof point:

  • In India, digitising government transfers cut bribe demands for receiving the payment by 47%, and boosted beneficiaries’ payments by excluding middlemen who skimmed funds.

Gap still exists:

Despite greater access to digital financial services, gaps remain in how they’re used among regions.

  • In Europe and Central Asia, 46% of adults engage in at least one type of digital payment, compared with 9% of adults in the Middle East.

Mobile phones help expand financial services – especially for people living in rural areas poorly served by traditional banks.

  • In sub-Saharan Africa, 12% of adults make phone-based payments, mostly through mobile money accounts, a number that reaches 55% in Kenya.


Given the link between financial inclusion and development, governments and businesses should keep pushing for more access to and use of financial services. Prioritising financial services does not take away resources from other priorities like access to healthcare, fighting poverty etc.. In fact, the evidence gathered to date builds a strong case that financial inclusion helps create the conditions that solves a lot of problems on emerging economies. I don't want to sound cynic but .. money solves a lot of problems, either you want it or not.

Sources: links within the article and below:

1., 2., 3.

Contact me at m.golebiewska@icloud.com or leave your email below and let's stay in tuoch. 

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