A Vision for Full Financial Inclusion

>Posted by Anita Gardeva and David Levai
At the Center for Financial Inclusion, we are excited about the idea of building financial sectors that can serve and include the estimated 2 billion people who currently have no access to formal financial services.
We are excited because we know how such access can create life-improvements even for the very poor.  From managing vulnerability through savings or insurance products, to taking advantage of entrepreneurial opportunities through working capital loans, to safely receiving remittances—these small benefits can leverage real-life transformations for families in the long-run.
Throughout our work in the past year, we have spent much time pondering questions related to financial inclusion such as: How many people do not have access to a bank account? What other services need to be developed to help the poor better manage their resources? How can the provision of financial services be improved so that the poor can make the most of these services? What are the barriers to using financial services at the bottom of the pyramid? Who is best equipped to extend quality financial services at scale to those who currently lack them?
In working through these questions we have come to realize that there is a gap in today’s ongoing discussions about financial inclusion: what exactly do we mean by “financial inclusion”? Is it the same as “banking the unbanked”? Are high-potential-for-scale models such as mobile banking the solution?
In an effort to bring together the various conversations, the Center has been working on a cohesive, concrete, and comprehensive definition of financial inclusion that we would like to share with you:
Full financial inclusion is a state in which all people who can use them have access to a full suite of quality financial services, provided at affordable prices, in a convenient manner, and with dignity for the clients. Financial services are delivered by a range of providers, most of them private, and reach everyone who can use them, including disabled, poor, rural, and other excluded populations.
This definition is at the core of our vision statement for financial inclusion and is based on four dimensions that address the type of products and services provided, how they are provided, who offers those services, and who receives them.  We believe that a unified definition of financial inclusion will generate broad and efficient strategies among policymakers, providers, and other stakeholders who are all striving to advance it.
The problem of access to finance at the base of the pyramid is well-known. And a solution has been emerging over the past three decades, through microcredit, microfinance, and today’s emerging hot topic: financial inclusion.  As financial inclusion continues to attract the attention of bodies outside of the microfinance industry—such as the United Nations, the G-20, the Obama administration, and policymakers throughout the developing world—we want to harness this momentum and transform financial inclusion from a hot topic to reality.
If we want to create a proper economic development strategy we need a large-scale effort to pave the road towards full financial inclusion and the first step is to agree on the final destination.
Now is the time to take action! Download our Financial Inclusion Vision Statement and tell us what you think. We look forward to your thoughts.
For more information, sign up for updates from the Financial Inclusion 2020 campaign.

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