Financial Inclusion a Global Cause for Concern
Financial inclusion can be characterised as a means to an end. By ensuring access for households and small and medium enterprises to safe, essential financial services, financial inclusion is a key facilitator of inclusive economic growth. Not only does financial inclusion promote regional economic objectives, it is also considered as an enabler for 7 of the 17 sustainable development goals defined by the United Nations Department of Economic and Social Affairs.
Policymakers must outline access indicators, usage indicators, and quality indicators to aptly measure financial inclusion.
- Access indicators measure the prevalence of financial services in rural areas and demand-side barriers
- Usage indicators assess the frequency at which the financially included access the resources
- Quality indicators help explain whether these resources meet market needs and aid understanding of the range of products offered
The world’s most unbanked countries are in Sub-Saharan Africa, Asia-Pacific, and South America. As per the World Bank Group, a significant number of countries identified for the International Development Association’s IDA20 replenishment program were in Africa. It became clear during the COVID-19 pandemic that IDA countries would be disproportionately underbanked and that initiatives would have to be taken to provide support and ensure that the poorest people were not left behind .
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